In the past several years we have seen a huge boom and bust in the China stock market. A few years ago the China stock market was the best performing stock market in the world and then in 2008 the China market crashed along with the global markets in the world financial crisis. However, since November 2008, the China stock market has outperformed almost all global markets.

For instance in March, 2009 when the S&P 500 and DOW made new bear market lows, the China stocks didn't. They held their lows and then went the global markets turned around led on the rally. Many China stocks quickly doubled in value in just a few weeks. Some even tripled in value!

There are many China stocks on American markets that US investors can buy that trade as ADR's. These are depository trusts that hold shares in foreign stocks. It simply is a trust that trades on the NYSE. When you buy an ADR trading on the NYSE you can't really tell the difference, so most investors don't even realize that they are buying a trust and not the stock directly.

We expect China's stock market to continue to outperform the global markets simply due to the fact that its strong economic growth is going to continue. For the past 25 years China's GDP has grown at an average annual rate of 10% a year.

The two most important sectors in the Chinese economy have been agriculture and industry. Most of the top Chinese stocks are in one of these two sectors

Until the early 1990's it was difficult for most investors to invest in China, but in the early 1990's China began to allow foreigners to buy shares of stock by purchasing special "B" shares of selected companies on the Shanghai and Shenzhen stock exchanges. These shares did not have voting rights in the company, but brought in huge amounts of capital into China to fund economic development and growth.

Of course investors profited from the enormous boom in the China stock market, but then had to suffer through the bust of 2008. But things are looking up for China and this is a good time to buy Chinese stocks.

The future is China. By 2050 China is going to overtake the US as the biggest economy in the world.