Meet Your New Leader: It's China

New leadership always emerges from the bottom of bear markets, and, in this case, it could be the Chinese economy and stock market. The Chinese stock market certainly led on the upside and downside, so it is not difficult to see how China could be an economic powerhouse in the next century.

Although it is a communist nation, China is moving slowly in the direction of freer markets. Conversely, the United States appears to be embracing a socialist attitude toward the markets, as evidenced by the mounting bailouts.

As investors become more and more careful with their money management decisions, there seems to be a high degree of healthy skepticism when it comes to Chinese company management and the numbers that Chinese companies report as earnings, cash flow, etc. Interestingly, misplaced confidence in the management and reporting of numerous U.S. financial institutions is what created much of the current economic turmoil. Perhaps investors are learning from their recent mistakes as they look for overseas opportunities.

China will grow and become an extraordinary story. The rally in Chinese stocks is only the beginning of a dramatic move higher. Investors in the U.S. will eventually embrace the story the way that the Nasdaq was embraced circa 2000. As China develops into a full-blown mania, similar to the way the Nasdaq did, I don't know what's going to be more entertaining -- watching people buy the top of a mania or listening to them try to pronounce the names of the Chinese stocks that they are buying hand over fist.

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You can play the Chinese markets through ETFs such as the iShares Trust FTSE-Xinhua China 25 Index Fund (FXI - commentary - Cramer's Take) or mutual funds such as the Matthews China Fund (MCHFX - commentary - Cramer's Take). You can also invest in ADRs of some of the largest Chinese firms, such as Baidu.com (BIDU - commentary - Cramer's Take), China Mobile (CHL - commentary - Cramer's Take), China Southern Airlines (ZNH - commentary - Cramer's Take), LDK Solar (LDK - commentary - Cramer's Take), Sina (SINA - commentary - Cramer's Take) and Focus Media (FMCN - commentary - Cramer's Take).

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At the time of publication, Horlbeck had no positions in the stocks mentioned.

Todd Horlbeck is president and founder of Horlbeck Capital Management, which he founded in 2002. Horlbeck was previously an investment broker at AG Edwards & Sons for 11 years. He is a graduate of the University of Wisconsin-Madison and lives in St. Charles, Ill.