How to Invest in What China Really Needs

There must be more communists in Berkeley than in Beijing. That thought crossed my mind as we swept through Beijing's wide streets, crowded with cars and lined with tall modern buildings. A more bustling capitalistic city would be hard to imagine.

I think most Americans would be shocked to see Beijing today. A friend of mine, well traveled and well-read, told me he thought he would find a city to compare to Mumbai or Managua. Instead, he found a city to compare to New York or Chicago.

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The Surprising Beneficiary of China’s Global Land Grab

On Thursday, June 10, China announced yet another investment in a global partner. Going where traders and investors no longer dare to venture, the Chinese are making investments in Greece – putting money into the country's ports, to be exact.

While it may sound like a surprise move, it's just China's latest investment play around the world, following investments in countries like Venezuela and Africa over the last year or so. The deal has many in the market wondering which country will be next in line to benefit from the country's deep pockets. So it makes sense to examine the transaction a little closer, because it does have specific implications for the foreign exchange world.

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Investing in China Gets Contrarian

An investment quiz to begin today's note. Two-part question:

1) Which country has more money to spend than any other?
2) Which nation currently represents the least-attractive investment environment? In other words, where is the one place a true contrarian would love – where no one wants to invest?

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Is China Undervalued Right Now?

During the past few years, China has become an increasingly compelling destination for investment capital. But with the recent weakness in the Chinese stock market – and serious cracks showing in the façade of China's economy – does it make sense to invest in China right now?

One money manager I know thinks so. In fact, he thinks that some of China's US-listed stocks are trading at low enough valuations to triple in 2010 regardless of how the economic situation unfolds… I'll introduce him to you in a minute.

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China’s “Otherâ€? Export

“I want a big car and a big house,� a fellow diner told us over sushi in Taipei's trendy Bellavita complex recently. “And property is so cheap there, I'm sure I'll have enough left over for one of those giant SUVs the Americans love so much.�

The gentleman was sitting a few places down from us at the restaurant counter. He and his daughter were here in “Isla Formosaâ€? to visit her grandmother. A successful chef (he mentioned that he'd catered more than one Oscar Night after party – “Russell Crowe is a nice guy…countryman of yours, right?â€?), our new mate has restaurants in LA and around his current hometown, just outside of Shanghai. Born here in Taiwan, he speaks fluent Mandarin, English and “kitchen Spanish.â€? His daughter, at the tender age of 5, is impressively well versed in all three languages.

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Connecting the Dots in China

A common thread runs through the morning's headlines. And since we were still under the spell of Lady Justice, we have to thank Dave Gonigam, who himself escaped unscathed from her grasp earlier in the week, for sifting through them.

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One Story to Sum Up Investing in China

We overheard one story while in Beijing, that captures in a nutshell the challenge in getting a handle on investing in China:

”I was in an antique store, negotiating for this antique knife,” our China contact told us. “I was about to make the deal when the guy looked at my Rolex watch and offered to exchange. I was ready to do it, but I knew my Rolex watch was a fake, and I didn’t want to take advantage of this guy. So I told him I didn’t want to trick him and that the watch was a fake. He said to me, “That’s OK, this knife is fake too.”

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To Get Rich is Glorious

Imagine the looks on their faces, when Deng Xiaoping sold them out.

The old commies in China had tried to make steel in backyard barbecues. They’d carried the fat Mao on a litter, on a long march to nowhere. They’d pretended his Little Red Book was more than drivel. They’d endured one absurdity after another…purges, starvation, and misery…all for the cause.

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As the World Turns: A Few Notes on Emerging Market Investing

In a recent edition of The Daily Reckoning, Bill Bonner observed, “The world turned against them at the beginning of the Industrial Revolution. But if the world turns long enough, it comes back to where it began.” He was writing about India. But he could have been writing about China…or Nicaragua…or any one of a number of emerging markets.

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