China's P/E Down to 20

After peaking just below 50 in January, the P/E ratio (trailing 12-month) of China's Shanghai Composite index is now at 20.95. Since China has long been considered an emerging market with high growth potential, it has historically had a high P/E ratio (average 36). However, a P/E of 20 is not unfamiliar territory for the index. Back in mid '05, the P/E got all the way down to 16.39 just before the historic rise in the index over the next few years.