FXI, can China go any higher?

FXI, iShares FTSE/Xinhua China 25 Index , bought at 94.67 early decemeber 06 saw it up to a high at 118.04 on Jan-03-2007, and watched it drop around 10% down to 105.95 over the next two days. This drop was apparently from anouncement by China's Central Bank to implement policies to slow economic growth (this isn't the first time they have done this).

I attempting to figure out a strategy for this ETF over the next week. I originally purchased this stock because I wanted exposure to the Chinese market. I have ever reason to believe that GDP growth in China will outpace the US over the next 5 years (but will not grow as fast at his been). The huge chinese ecomony has had exceptional growth in the last 5 years, and will most likely continue to grow over the next several years, just maybe not at the break-neck pace it has been going at.

I think there is a possibility that China will suffer a correction sometime in the nearish future. The severity of this correction will be based on how well China can control there growth. If they implement policies to slow growth, yet the larger Chinese companies earning continue up, then things should be fine. If the economic policies cause the companies to not meet expectations, China could land hard ( however this would be a big problem for the rest of the world).

So what does this all mean. I'm not quite as bullish on FXI as I was, but still believe there is plenty of oppurtunity there. If FXI continues down this week, this may be the correction, and it may be time to dump some taking profits, and wait for it to start heading back up again and purchase more on the way back up (i've seen reports of corrections from 10-50%).

(As of this write time , Taiwan and Singapore are down so chances are China will be down again, and I may be looking at a sell).