Chinese stocks rallied again on Tuesday, stretching a comeback into another day.
The FXI large-cap China ETF climbed 1%, adding to a 3% gain in just the past two sessions. Those names had been crushed after a regulatory crackdown out of Beijing that involved some of the country's top tech companies.
CNBC's "Trading Nation" asked its traders Tuesday: Is this comeback the real deal or just a head fake?
"I don't think we can look at China the way we used to as kind of the world's growth engine. Beijing has engineered an intentional slowdown to end boom-bust cycles that are hard on the consumer. Their focus right now is regulatory crackdown to the benefit of the consumer," said Nancy Tengler, chief investment strategist at Laffer Tengler Investments.
Tengler points to China's recent crackdown on for-profit education such as tutoring in order to make access affordable to everyone in the country. Turning an entire industry from for-profit to not-for-profit "overnight" means "nothing is really sacred or safe," said Tengler.
"Watch the PMIs, they're barely above expansionary levels, orders are weak, backlogs of orders are weak in China, it's exactly the opposite of the U.S.," she said. "The U.S. is going to be driving growth, global growth going forward, and China's going to be on the sidelines trying to rejigger."
Michael Bapis, managing director of Vios Advisors at Rockefeller Capital, agrees that the comeback may not last.
"There's too much uncertainty around what the future looks like for that market. The markets are totally dislocated. There's a lot of noise around the forced economic slowdown, there's a lot of noise around the regulatory crackdown, and it just creates volatility and uncertainty for no real reason," Bapis said.
The FXI ETF is down 10% this year and has fallen by more than 20% since a recent high in February.
"You're going to see other emerging markets and international markets outperform the Chinese market for at least the near term, and you've had some big banks cut estimates and slash estimates," Bapis said. "And so I just think, you know, take a step back, look into other markets for now, let the dust clear, let the smoke settle, and then move on after that."