Editor's note: This is the fourth article in a series on investing in China. The previous columns were China Investing: Like a Kid in a Toy Store, How (Not) to Invest in China and Catching China's Uplisting Wave.

There are plenty of reasons to invest in China.

China never was in a recession and has been growing at twice the fastest rate we've seen over here in a couple years. They make less than us per person, and they save. They want what we have. And rumors are that their new "more entitled" generation spends more.

Here's my advice: Set up a trap to funnel their money your way.

My ideas for investing in China aren't your generic plays like the two popular ETFs:

iShares FTSE/Xinhua China 25 Index

(FXI) - Get Report


PowerShares Golden Dragon Halter USX China

(PGJ) - Get Report


Here are my four ideas for the "sophisticated" investor.

  • First, companies that are priced more cheaply than the profits that they are going to make in the next year are growing harder to find by the day. Here's a pick that is cheap, growing and sophisticated. It's China Organic Agriculture (CNOA) .
  • Second, how about a company that makes cactus-based cigarettes that are slotted for launch later this year after they were awarded the patent last year heading into the market crash? China Kangtai (CKGT) has three years of steady growth, future growth under progress and is priced to shrink.
  • Third, let's look at a company with a market cap of less than $100 million, capable of working projects in 7-star hotels, having just announced a new agreement worth $500 million. Oh, don't forget that the backlog is $636 million. As an engineer, I can say the buildings CAE( CAEI) works on are by far some of the most advanced I've come across in my lifetime.
  • Fourth, interested in going nuclear? With a market cap of $11 million and being the only publicly traded Chinese company with the ability to produce nuclear graphite, China Carbon (CHGI) is your ticket to profits off of China's target of 40 nuclear reactors by 2015.

It just received a $5 million purchase order and has been advised by the local government to apply for a $26 million loan. Rumors suggest that it already has a potential acquisition target that would double revenue and income.

I've been told that there are two main ways to accumulate large sums of money. You can make it or you can save it. I always take shortcuts, and today is no different.

My shortcut: Successful investing allows you to make money with your savings. Where I come from, that necessitates not losing money. If you can take your savings and successfully invest it, you can grow a small sum of money into a large sum of money.

At the time of publication, Bradford was long China Organic Agriculture, China Kangtai Cactus Bio-Tech, China Architectural Engineering, and China Carbon Graphite. Glen Bradford is the CEO of ARM Holdings LLC; a hedge fund advisory company. He's pursuing an MBA at Purdue University and is trading his entire tuition in the stock market as well as the tuition of his roomate. His goal is to buy the most undervalued companies that are making money and set to make more money that he can find. In March 2009, he was quoted for saying, "Uncertainty will certainly work for me."