Many Wall Street professionals think that China’s economic growth is grossly overstated.

Successful hedge fund manager Doug Kass is one of those people. In a recent article on TheStreet.com, Kass predicts that China will see unemployment rise in 2009 as the country's growth rate for real GDP moves towards zero by the second quarter. Will he be right?

If you subscribe to global investing guru Jim Rogers, then you surly can’t agree with Kass. Rogers is so serious about China that he has moved his family to Singapore and he’s teaching his kids how to speak Mandarin. In a recent video posted on YouTube, Rogers calls the Chinese among the best capitalists in the world right now.

What do you think about investing in China's economy? Here are some ideas.

On last Wednesday’s Top 2009 China Stocks video segment, David Sterman, research analyst for TheStreet.com offered up his top three China stock picks for next year. One of the names he likes is Sohu.com (SOHU). Sterman said Sohu.com will benefit as large amounts of consumer spending moves online.

Since Sterman is bullish on Sohu.com, investors might want to add to their radar some other Chinese Internet companies, such as Baidu.com (BIDU), SINA (SINA), NetEase.com (NTES) and Shanda Interactive Entertainment (SNDA). Visit the China Watch Portfolio to learn about two more top China stock picks for 2009.

Recently, China cut interest rates in an effort to revive growth for its slowing economy. Will the 27 basis point cut work? On last Friday's China Watch: Cutting to the Chase video segment, Dave Peltier, research manager for TheStreet.com expressed surprise that China didn’t cut their interest rate more, since the U.S. has taken their rates to almost zero.

Peltier explained that China has been cutting rates for awhile, and he doesn’t think we will see any positive economic effects until late next year. Check out the China Watch Portfolio to see which U.S.-based company he likes for a play on China.

Is U.S.-based footwear company Nike (NKE) a good investment on China?

On Monday’s China Watch: Liking Nike video segment, Kristin Bentz (a.k.a. The Talented Blonde) said Nike is a great buy at current levels. She explained that Nike’s balance sheet position of $2 billion in cash and little debt will allow the company to weather any global footwear slowdown. Bentz pointed out that in Nike’s most recent quarter, the company offset slow domestic sales with strong international sales from emerging markets like China.

Is the Shanghai real estate market set to take off?

On Monday’s China Real Estate Market Heats Up video segment on CCTV, the anchor said the Chinese government is implementing new loan programs for second-time home buyers to boost the real estate sector. The new programs will allow people who buy their second home access to favorable lending rates that currently are only available to first-time home buyers.

Also, the mortgage lending ceiling in the city’s housing fund program will double, to 400,000 yuan for second-time home buyers if at least two people are able to cover the repayments. Three stocks that could benefit from this news include Xinyuan Real Estate (XIN), E-House China Holdings (EJ) and Calymore/AlphaShares China Real Estate ETF (TAO). Visit the China Watch Portfolio to learn more about these names and other China real estate plays.

Got questions?

Investors who want answers on how to play China can submit questions to the "China Watch Weekend Mail Bag." On last Saturday’s China Watch Mail Bag: Cramer’s Rate Cut Reactions video segment, Stephanie Link, director of research for Jim Cramer’s Action Alerts Plus Portfolio discussed which China stocks Cramer is following.

Link mentioned that Cramer is starting to buy the China ETF iShares FTSE/Xinhua China 25 Index (FXI) because it’s a broad representation of the largest growth companies in China. She also said Cramer is adding to Freeport McMoRan Copper & Gold (FCX) for a play on improving copper demand as China’s economy rebounds. To see some more China stocks that Cramer likes, check out the China Watch Portfolio.

Posted on Dec. 30, 2008