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

I like this ETF right now with stops at $32. This one could easily trade above $38 within the year.

3. Global X China Consumer ETF (CHIQ)

This is my favorite Chinese ETF. As its name implies, it focuses on the rapidly-growing Chinese consumer sector. Its largest holdings include stalwarts like China Yuran Food Group, sports brand Li Ning and airline Air China Limited. I am confident China's middle class will continue to expand and thrive, despite the perceived current slowdown. This ETF is a direct play on China's transition to a middle class economy.

Shares have recently bounced off their lows. A break out and close above $12.50 will make a technically sound entry point. I expect this ETF to be above $14 within the year.

Risks to Consider: Although I firmly think the worst is over for China, no one knows for sure what the future holds. The government protects businesses in China. Google (GOOG) learned this the hard way as it continues to battle censorship of its search engine and other services to Chinese citizens.

The Chinese government could easily revert to its heavy hand of state control. In addition, despite the African trade initiatives, China faces heavy winds from the euro crisis. Be certain to use these ETFs as a diversification tool, rather than putting all your eggs in the Chinese basket.

Action to Take: I like all three of these ETFs once the listed technical triggers are fired. But be sure to always use stops and position size correctly based on your risk tolerance and risk capital account size.



Dave Goodboy does not personally hold positions in any securities mentioned in this article. 

StreetAuthority LLC owns shares of GOOG in one or more if its "real money" portfolios. 

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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