[UPDATED] The Nasdaq Stock Market, plans to introduce the NASDAQ China Index to track the performance of the largest US-listed Chinese companies.

Companies headquartered in China, inclusive of Hong Kong, which are listed on Nasdaq, the NYSE or the American Exchange are eligible for inclusion in the index.

The move reflects the growing number of Chinese companies that have chosen to list in the US and obviously it will appeal to lazy investors who can now use Nasdaq's list of China plays rather than having to do their own research.

But a loud warning bell sounded in EngagingChina's headquarters when we read Nasdaq's official release.

There are now countless China plays with a listing in the west and they come in all shapes and sizes. Its difficult to see what they have in common — apart from getting most of their revenues from China — and many are engaged in businesses that are, to put it mildly, not for the risk-averse.

The most glaring example is Bodisen Biotech, which supposedly makes a superior type of fertiliser, but now faces being delisted for non-compliance with Amex rules.

UPDATE: Nasdaq-listed PacificNet, whose interests span CRM software, games and mobile internet in China, also faces delisting unless it can clarify some murky options payments.

Caveat Emptor, as they say in China.