Dump The Psychologist and Buy China Stocks

If the following statistics don’t convince you that China has risen again, you better take a visit to a psychologist.

•    So far in 2009, the MSCI China Index is up 30%.
•    May retail sales rose 15.2% vs. a year ago after April's 14.8% gain.
•    May's industrial output rose 8.9% on top of April's 7.3% increase.
•    Chinese investment in urban areas for assets like roads and apartments rose 40% in May versus a year ago.

And you might want to keep the good doctor around if you don’t have China or China-related stocks in your portfolio. Here are a few that trade on the NASDAQ or NYSE and cover a wide range of industries.

Rather than track $22 billion Celgene (NASDAQ: CELG), why not follow American Oriental Bioengineering (NYSE: AOB), a $500 million maker of traditional medicines in China? At $5.29, this stock seems heavily discounted. It's no secret that China is a massive market, and this company should be well positioned for growth.

As China continues to grow, rising incomes will allow more Chinese people to be able to afford AOB's products.

E-House (NYSE: EJ) is the largest Chinese property agent. It is the Chinese version of Century 21. However, the firm faces very different housing market dynamics in China.

Chinese consumers tend to borrow considerably less than Americans or Europeans to finance home purchases, with down payments averaging about 40%. As a result of this lower leverage, China experienced a less severe drop in property prices.

Although buyers paused in 2007 after the government took measures to curb the rapid rise in real estate prices, the recent reversal of those policies has boosted the housing market.

The firm has a strong market position, doesn't carry inventory like developers, and has a healthy balance sheet with no debt.

Asia Info Holdings (NASDAQ: ASIA) is a telecom company that provides billing software to major carriers. China's plan to adopt 3G, a much faster wireless protocol, was approved by the government in late 2008. Implementation cost is expected to top an eye-opening $60 billion.

On top of that, the government created a new wireless competitor by merging the wireless units of the two dominant fixed line operators in China, curbing China Mobile's wireless monopoly.

Asia Info Holdings stands to benefit as their billing becomes increasingly necessary as data services expand.

New Oriental Education (NYSE: EDU) provides foreign-language training and college test preparation courses. Education is highly prized in China, and the huge gap in wages between the educated and uneducated is leading families to invest heavily in their child's studies.

As the dominant player in providing early English education for children, New Oriental is a household name in China. The company has demonstrated success in helping students prepare for the Gao Kao college entrance exam, similar to the ACT or SAT here in the United States.

Finally, Longtop Financial (NYSE: LFT) is a great way to invest in the development of the financial sector in China. The company develops software to help banks run their business. This stock will allow you to ride the wave of financial sector growth yet avoid some of the risks inherent in China's government-influenced banking sector.

The company reported great quarterly results this past week, exceeding expectations with an equally strong outlook.

Bottom line: Dump the psychologist and buy China.