A 40-year-old joke asks, “What do you call five American diplomats clinging to the runners of a helicopter in liftoff?”

Answer: “An orderly withdrawal from South Vietnam.”

The punch line, referring to filmed images of the urgent U.S. evacuation of Saigon, mocks official euphemisms that downplay the chaos and desperation of a fast-moving debacle.

But that humiliating exit also undercut the general concept of “containment” – the idea that dangerous forces could be held at bay with aggressive countermeasures.

In China today, authorities are trying to contain a runaway selloff in the wild mainland stock market that has dropped the main index of Shanghai (000001.SS) and Shenzhen (399108.SZ) stocks by more than 30% in a few weeks. The central bank is funding stock purchases and hundreds of stocks halted for trading. And they’re using oddly gentle language to describe the situation.

The Chinese stock regulatory agency stated: "At the moment there is a mood of panic in the market and a large increase in irrational dumping of shares, causing a strain of liquidity in the stock market."

Well, if it’s only a momentary irrational mood, then surely it will pass soon, right?

More seriously, the question of just how contained the treacherous, unruly Chinese stock market is from U.S. markets, is a real and important one right now. “Contained,” as we know, now has an unreliable connotation after it was used to describe the subprime mortgage mess before the financial crisis.

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It’s interesting that the bear assault on China shares has merely dropped the benchmark CSI 300 index (000300.SS) – roughly tracked by the ETF under symbol ASHR – to levels it first reached on March 16. It so happens that the American S&P 500 (^GSPC) tradeded that day at 2081 – exactly where it closed on Tuesday.

Yet in the interim, the Chinese market surged 46% into its June high before collapsing by 32% since. The S&P, over that same time barely budged – rising a mere 2.3% to its high and then slipping around 3%. In the eight months before the CSI 300 and S&P 500 got to those March levels, the China index had soared 68%, and the U.S. index just 6%.

So if the U.S. market never caught the benefit of the explosive surge in Chinese equity-market values, why would the violent unwinding of this overheated rally matter terribly much for American investors – who generally aren’t significantly invested in the mainland market?

Based on the ugly action in oil (CLQ15.NYM), base metals and other raw goods lately, it seems markets are inferring at least something about China’s growth prospects and industrial appetite from the market action.