This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

China Power Play

When a manager of the (ICHKX)Guinness Atkinson China & Hong Kong Fund recently wanted to gauge China's infrastructure first hand, he hit the open road. Tim Guinness rented a car in Hong Kong, headed to the mainland and drove all the way north to Beijing. His conclusion: road tripping in China was surprisingly easy, with decent-quality highways and little bureaucracy. That finding helps explain his fund's heavy exposure to mainland energy plays. Over the long term, Guinness and fellow portfolio manager Edmund Harriss believe oil stocks should benefit as an expanding population of car owners heads to gas stations throughout China.

TheStreet.com spoke with China & Hong Kong fund lead manager Harriss about his taste for energy and commodity plays, and why he thinks the Chinese economy can avoid the hard landing some market watchers were predicting a year or two ago. The 12-year-old Guinness Atkinson fund has gained 12% year to date. Over the past decade, it's averaged a 6.35% return before taxes, compared to 7.40% for the Hang Seng Index and 9.06% for the S&P. It invests primarily in securities traded on the Hong Kong and Chinese exchanges (in the U.S., some of these shares only trade on the pink sheets).

TheStreet.com: What are your thoughts on the recent equities selloff that's hit Chinese, as well as U.S. shares, since mid-May? Why do you think it's happened, and will the selling continue?

Harriss: I don't believe yet that we're going to see any particular sort of adjustment in forecast earnings. I think the risks have certainly become more apparent. If the U.S. consumer hits the skids, is that going to drag down China's export growth? China's exports are not the most important part of its economy, but they are important. So you would find that certain sectors, certainly manufacturing and exports, would suffer.

On the other hand, I find that China's domestic economy has sufficient strength and firepower and availability of investment to keep powering ahead. There's a growing consumer market and a drive toward opening up the internal provinces that improves productivity, and that will give China some support.

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,915.07 -70.54 -0.42%
S&P 500 1,964.68 -8.15 -0.41%
NASDAQ 4,396.2040 -22.83 -0.52%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs