The decline in Chinese equities is continuing this evening as investors become increasingly concerned about the property bubble and the government’s response to a potentially overheating economy. Stocks in Shanghai are down 2.3% this evening and are now off 11% year to date.

Despite touting the growth of China as the harbinger and a pillar of the global recovery as the rally began in 2009 U.S. investors are now firmly ignoring any action outside of U.S. borders as investors become enveloped in a cloud of “better than expected” earnings and economic data.

Meanwhile, the Eurozone continues to slowly unravel in sovereign debt fears and China’s equity markets remain deeply in negative territory for the year. As we’ve noted before, Chinese equities served as a leading indicator into and out of the recession.

It will be interesting to see if U.S. investors are once again ignoring a glaring warning sign from abroad….