 Despite a recent crackdown on insider trading in China, an assumption persists regarding the relative information inefficiency and asymmetry of less developed markets. Researcher Qi asks, how much is private information exploited in a less developed financial market like China? As it turns out, quite a lot. To arrive at this conclusion, he studied six years worth of trades by corporate insiders, including top executives and board members. While technically legal, these trades mimic the behavior typical of insider trading. Each year, these pseudo-insider trades allowed mutual funds to beat the benchmark index by 14%. In contrast, U.S. mutual funds rarely outperform index funds. This suggests that insider information could be affecting stock prices in China. But before portfolio managers dive into the art and science of insider mimicking strategies, they should note that during the second half of the study period, the predictive power of insider buys was much weaker. So over time, the Chinese market seems to have become more efficient, and the recent crackdown on insider trading will only accelerate this trend. China's stock market may be relatively young, but it's also the second largest on earth, making its performance critical to investors around the world. And as this market continues to expand and improve its information efficiency, investors and researchers will want to keep a close watch.