NEW YORK ( TheStreet) -- Two weeks ago, China hiked interest rates for the first time in three years. Nobody had seen it coming. Up to that moment, investors believed that the country would not upset the world's apple cart, even with its hot-running 9%- to- 10% GDP.

Yet they did indeed raise rates on Oct. 19. The People's Bank probably felt that with assets 30% higher than the summertime lows, it was time to cool the speculative appreciation of assets. (How ironic is it that China's robust growth requires rate hikes, whereas anemic U.S. growth means a second round of quantitative easing?)

The implications of Chinese monetary tightening are (and were) straight-forward. Resource-related companies and resource-rich countries might not fare as well if they ship less materials to the mainland. Not surprisingly, shares of Brazil ( EWZ), South Africa ( EZA) and Australia ( EWA) tumbled on Oct. 19.

Two weeks later, on Oct. 11, we can see why China raised rates in the first place. The country's manufacturing growth actually accelerated in October. The recent data serves to confirm that the People's Bank has its eye on the ball.

For investors, however, the correct call is a bit more challenging; specifically, manufacturing success in China may or may not be beneficial to materials exporters over the next few months. After all, doesn't the acceleration in manufacturing increase the odds of additional China rate hikes?

It follows that I am less inclined to select China's more obvious trading partners right now. I am more inclined to select Chinese industrial firms themselves as well as non-resource-related trading partners.

Here are 3 ETFs that benefit from manufacturing growth in China, even with the uncertainty surrounding future rate hikes:

1. iShares MSCI Singapore ( EWS). One look at this fund's holdings tells you most of what you need to know. The market-cap weighted index tracked by EWS has a 10% weighting in Oversea-China Banking Corporation.

OCBC Bank is the second largest bank in Southeast Asia and was one of the only foreign banks with a branch presence in China in the 1950s, fostering brand name loyalty. Singaporean companies have invested tens of billions in China's Guangdong, Shandong and Jiangsu provinces, particularly in telecommunications and electronic equipment manufacturing. Singapore Telecom is a top 10 holding.

2. iShares Taiwan ( EWT). When I lived in Taiwan in the 1980s, a military take-over by China may have seemed remote, but hardly out of the realm of possibility.

Today, the relationship is far less strained; trade pacts are commonplace; direct investment flows in both directions. What makes EWT a potential winner right now is the potential for an Internet boom on the mainland. To the extent social networking, gaming and video streaming continue to thrive in China, the information-technology heavy EWT (60%) should thrive as well.

3. Global X China Industrials ( CHII). This one may not have the volume to get the kind of trade execution that I prefer. But hey, if it's manufacturing success on the mainland, these are the very corporations that are producing things. CHII tracks an index that is designed to reflect industrial sector performance, from industrial equipment manufacturers to transporters (e.g., shipping, railway, etc.) to engineering firms.
Disclosure Statement: ETF Expert is a website that makes the world of ETFs easier to understand. Gary Gordon, Pacific Park Financial and/or its clients may hold positions in ETFs, mutual funds and investment assets mentioned. The commentary does not constitute individualized investment advice. The opinions offered are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial or its subsidiaries for advertising at the ETF Expert website. ETF Expert content is created independently of any advertising relationships. You may review additional ETF Expert at the site.

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