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Tickers in this Article: SOHU, EDU, FTEK, VISN
The 2008 Olympic Games kick off today in China and there are three Chinese stocks that could be standing on the podium when it is time to hand out the metals to the winners. Granted the Chinese stock market has had a rough year heading into the games - the Shanghai composite index is down 55% from the October 2007 high - but for some stocks this is a great buying opportunity. Below I will unveil my three Chinese winners. I've also included an American company that is bound to get plenty of attention as the games go on due to its air purifying technology.

Gold
Sohu.com
(Nasdaq:SOHU) - Based in Beijing, Sohu is China's leading internet portal. It offers content that covers all aspects of life as well as email and instant messaging. What makes Sohu so significant this week is that it has the exclusive rights to the Beijing Olympics. The Olympics in China are a very big deal for the citizens and with most unable to attend, the next best venue for information is their computer. Then there is the technical analysis that shows a stock that has held up very well during the Chinese and U.S. sell-off, and it has yet to break its uptrend. Fundamentally, the stock is even stronger; during the last quarter earnings grew nearly seven-fold and the company raised guidance for the upcoming quarter. Not only does Sohu have the Olympic exclusivity, but it also has potential for much more growth as internet usage increases in China. (To learn how to evaluate a stock with both charts and earnings, check out Blending Technical And Fundamental Analysis.)

Silver
VisionChina Media
(Nasdaq:VISN) - Advertising during the Olympics is major expense for companies worldwide that are trying to get their message out to the masses. What better way to do that than through the over 40,000 display screens which VisionChina has placed in major Chinese cities. Most of the advertising screens are located on buses that millions of riders each year are using to get around. Once the Olympics are long gone, there will still be the desire for American companies to make their way into the growth potential in China, and VisionChina will be a beneficiary of advertising budgets. As the middle class continues to grow through the demographic shift in China, VisionChina will be there to offer new and exciting product advertising through their television screens. (For more on the importance of creative advertising, read Advertising, Crocodiles And Moats.)

Bronze
New Oriental Education & Technology (NYSE:EDU) - How would you like access to a market that is worth over $70 billion? The education market in China is just that, and New Oriental Education is the front runner as the largest provider of private education services in the country. I believe once the Chinese citizens get a taste of the international cultures that will be prevalent during the Olympics, it will give them even more passion than they already have to become educated on a higher level. The stock is down approximately 10% in 2008, but is holding up much better than other Chinese stocks due to its growth potential. In July it reported that last quarter's revenue rose 63% from a year earlier, and over the last month the stock is up about 25%.

American Gold
Fuel Tech
(Nasdaq:FTEK) - The first three winners are based in China, but Fuel Tech is located in the good-old USA. Most likely the biggest story out of China during the Olympics besides the actual games will be the pollution and the poor air quality. This could be due to the fact China gets 80% of its energy from coal, which emits large amounts of pollution into the air. Fuel Tech sells two products that help reduce the amount of toxins that are released from the combustion of coal. Recently Fuel Tech has been making headway in China and begun working with companies to help lower the air pollution. The upside potential is huge for Fuel Tech not only in China, but also the U.S. and abroad.

Final Playbook
If the Chinese economy takes a major turn for the worst after the Olympics and the stock market follows, it will likely take down the entire group of China-related stocks. On the other hand, the 50% pullback from the highs in the Shanghai Index may end up being a great long-term buying opportunity. Overall, the risk in China-related stocks is above average and volatility is common.

To discover how to gain exposure to the Chinese market, check out Investing In China.

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