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Tickers in this Article: CEA, CEO, SOHU
Despite all the ups and downs in the world economy, China remains a solid engine of growth and will continue to grow for some time. It is estimated that within the next 10 years or so, China will become the world's largest economy as measured by GDP.

China's economy has cooled somewhat this year; the country's GDP grew by 9% in the third quarter from the same quarter in 2007. This is down from 10% year-over-year growth in the second quarter, according to numbers released last Monday by China's National Bureau of Statistics. However, this cooling has created some great buying opportunities in the once high-flying Chinese stocks. To take full advantage of this situation, you must not let the short-term volatility become a distraction - instead, focus on the long-term big picture.

Three stocks that have some real promise include: China Eastern Airlines (NYSE:CEA), CNOOC LTD (ADS) (NYSE:CEO) and (Nasdaq:SOHU).

Low Multiples
China Eastern Airlines has a trailing price-earnings ratio of 6.48, while CNOOC has a forward P/E of 4.52 and has a forward P/E of 10.20. All three are hitting lows: Two reached their 52-week lows Thursday, with China Eastern Airlines hitting $12.44 and CNOOC dropping to $64.50. hit its support level of $45.00. (Learn more about this "barrier" to trading prices at Support & Resistance Basics.)

All three can provide us with a wide diversification across the Chinese economy. China Eastern Airlines has been affected by the high price of jet fuel, but the recent pullback in this commodity will help its bottom line. It is estimated that air travel demand will grow by 15% next year. "In the longer term intrinsic demand for air travel will still be pretty robust because the income level in China is still on the rise and is still way below that of the developed countries," said Edward Xu, an airline analyst with Morgan Stanley.

CNOOC is a major oil company. And as China continues to grow, the demand for oil and gasoline will continue to rise. It is projected that for the foreseeable future Chinese oil demand will grow by 7.5% a year. is an internet company that includes searches, online advertising and wireless services. As the country continues to grow, more people will gain access to the Internet every day. According to IDC, China's information technology services market will grow 17.4% per year from 2006 to 2011, with China becoming the largest regional IT market - and the fifth largest in the world - by 2011.

Balance Sheets in Solid Shape
The most recent quarter's balance sheets at CNOOC and are outstanding. CNOOC had $7.64 billion in cash and $1.56 billion in debt. had $225.98 million in cash and just $6,000 in debt. What all these facts are telling us is that the three companies can provide us with impressive growth over the long term. However, shares could remain volatile over the short term because of the worldwide economic slowdown and the fears surrounding how this can affect the Chinese economy. If you can handle the short-term swings, then these are three potential investments that require a serious look.

Bottom Line
To be profitable in China you must take a long-term, big-picture approach. Yes, there will continue to be ups and downs like what is happening now in China. However, a long-term approach will override these swings and allow you to participate in the rapid growth that the country will experience over the next several years.

For more about taking part in this country's growth, read Investing In China.

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