NEW YORK (TheStreet) The gyrations in the Chinese stock market may be scary, but don't run away so fast. Bobby Bao, portfolio manager for the Fidelity China Region Fund (FHKCX) - Get Fidelity China Region Fund Report, said these are merely "growing pains" which will soon pass.

"If you look at the size of the total margin debt outstanding in China it is 1.5 trillion renminbi [about $242 billion]. It's not small, but to put things into perspective, the total household savings in the country is 63 trillion renminbi and total bank deposits are over 100 trillion renminbi," said Bao. "So while it creates a lot of short-term noise, the long term fundamentals have not changed and we are seeing a lot of opportunities now."

The Fidelity China Region Fund closed at $32 yesterday, still up 4% year-to-date, but down from almost $40 in late May. Shares of the fund have fallen approximately 7.5% in the past 12 months.

TheStreet Recommends

Chinese stocks ended a five-day losing streak yesterday after the country's securities regulator enacted rules against selling certain stocks. The Shanghai Composite jumped 5.8%, nearly reversing a massive decline a day earlier. Bao applauded the move by Chinese authorities, calling it "well-founded."

"They are trying to bring stability back to the market," said Bao. "So as a long-term investor, I am encouraged that the government is alert and they are trying to help with the long term prospects."

In terms of specific sectors, Bao increased his exposure to insurance companies and banks in the first quarter and he continues to like financials through the current crisis.

"There is still a huge protection gap in insurance in China," said Bao. "A lot of Chinese people are uninsured, and those that are insured are buying insurance products for financial purposes rather than for protection purposes. As the population continues to age and as middle-class incomes continue to accumulate over time, demand for insurance products is tremendous over the next 15 to 20 years, and valuations are not that expensive."

As for the banks, Bao called their valuations "extremely cheap," adding that they are trading as if there is going to be a "major financial crisis at the doorstep." He also sees reasonable valuations for the country's internet sector, an area that has been hit heavily by the recent volatility.