Does China sound like an interesting place to invest? It could be a good place for a small part of your portfolio. China’s a giant market, with a population that’s increasingly skilled, productive, and hungry for consumer goods. This party has been going on for a while now, but many believe it will continue at least until the Beijing Olympics. Here are some ways to invest in China:
CHL, China Mobile, provides mobil phones and related services. It’s based in Hong Kong.
CEO, CNOOC, does oil and natural gas exploration, development, production and sales for power-hungry China. As well as offshore China holdings, it has interests in Indonesia, Australia and Nigeria, among others.
SOHU, Sohu.com, is an Internet media company. It does portals, search, real estate information, games, etc.
BIDU, Baidu, provides Internet search in Chinese. For this reason, it is sometimes called the Google of China, although there are important differences.
FMCN, Focus Media, does electronic advertising on billboards, over phones, and through many modern media.
Even though you research these stocks thoroughly, it still may seem too daring to invest in single stocks in a distant land. Another approach might be to invest in Western companies that supply commodities to China’s industrial machine. FCX and RIO supply metals, BTU owns a coal mine in Australia among its many other assets, and JOYG provides mining equipment worldwide. For a different approach, try investing in companies that could benefit from China’s manufacturing surge and rising living standards. There’s WMT, Walmart, YUM, fast food, or even the beaten-down SBUX, Starbucks.
Then there are ETFs (the modern mutual funds that trade all day) with holdings in China. You could research some of these. FXI invests in China’s largest companies. So do GXC and PGJ, in different ways. For more diversification, invest in a “Chindia” fund, FNI. Or a Brazil-Russia-India-China(“brick”) fund like EEB or BKF. VEU, from Vanguard, goes anywhere in the world but the US. Or, if this China thing seems over-hyped to you, you could buy a tiny bit of FXP, and go short, in case China ever has a rainy day.