Does that imply that EMH doesn't apply to financial assets in corrupt economies, specifically to external (foreign) investors who can come and leave as they want?
Yes, although with China you can't necessarily leave when you want as the government might restrict sales.
Can a passive investor afford to ignore it?
No, but by investing in U.S. firms that do business in China you are not ignoring it.
US firms? Your main China exposure is going to come from your Aussie mining exposure.
This thread is for asking any questions that might seem obvious, tangential, silly or what-have-you. Don't be shy, everyone has holes in their knowledge, though the fewer and the smaller we can make them, the better.
Please be respectful of other people's admitting ignorance and don't mock them for it, as they're doing a noble thing.
To any future monthly posters of SQ threads, please remember to add the "stupid_questions" tag.