This Day On The Street
Continue to site
ADVERTISEMENT
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

The 3 Best Stocks to Play China's Still-Amazing Growth

By Dave Goodboy

NEW YORK ( StreetAuthority) -- I love buying when there is blood in the streets.

When negativity hits its apex and everyone is down on a particular stock, sector or economy, it's often a sign it's time to buy.

This bottom-fishing style of investing is not easy psychologically. In fact, it's very difficult to go against the crowd. But this is exactly why it works. In the annals of the stock market, buying when things appear worst has proven itself time and again.

This is particularly true when it comes to large global economies.

Recently, investors have been besieged by negative economic news out of China. Slowing growth, weak property markets and internal strife have rocked the world's second-largest economy so far in 2012. These items, combined with several high-profile corporate scandals, have worked together to send the once high-flying Chinese stock market skidding lower.

But even with all of these issues, China remains a rapidly growing economy with a very bright future. In fact, investment opportunities in China are not nearly over and the recent downturn just created a nice buying opportunity for investors who want to make money on China's growth.

Here are three reasons why China is still a good investment...

1. Economic liberalization and political reform

This fall, a political transition is slated to take place with Vice President Xi Jinping to assume power from President Hu Jintao. Jinping is a strong proponent of what is called Chinese socialism. This twist on the Socialist manifesto favors economic liberalization and an aggressive political reform. In other words, he believes in the free market, at least as much as a member of his party can.

In addition, the Chinese central bank is taking market positive actions to counteract the slowing economy. For instance, the bank recently lowered interest rates twice within the same month. This type of economic stimulus should help reverse the slowdown.

2. Chinese economy still in growth mode

Next, although economic growth is slowing, it's still at 8.1% year-over-year. Compared with the European economies or even the United States, this is impressive growth. China has a huge population hungry for advancement. Internet usage, for example, is double that of the United States, while Chinese consumption has superseded that of Japan.

Remember, this remains a nation of super-low average wages. Imagine what is going to happen with the economy when wages eventually catch up with more-developed nations.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
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!
SYM TRADE IT LAST %CHG
FXI $52.64 1.40%
CHII $20.55 1.78%
CHIQ $15.86 0.95%
AAPL $132.50 1.70%
FB $82.30 0.94%

Markets

DOW 18,084.38 +4.24 0.02%
S&P 500 2,113.83 -3.86 -0.18%
NASDAQ 5,070.1580 -21.9270 -0.43%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs