It’s becoming increasingly clear that the U.S. stock market is in sick bay and likely won’t be up and around until the second half of 2008, and possibly until 2009.

While some areas, like gold and sector plays are good choices in a bad economy, it’s also a safe bet that if one country’s financial health is in crisis, another one’s are vigorous and vibrant. That’s where we are with the US and China these days. For all the hand-wringing about the U.S. economy and stock market, the opportunity to make money along the Pacific Rim, especially China, is both real and timely.

I'm particularly bullish on the Chinese mobile phone market, and I'll get to that in a minute. But the overall China picture needs a little framing first.

There are a couple reasons for going the China route. First, China remains a developing country—albeit a huge one. With economic growth exceeding 8% annually, year after year, well-managed companies will reap huge profits as China’s 1.5 billion increasingly affluent consumers exercise their collective economic clout to purchase enormous quantities of every conceivable consumer product. Companies that produce the infrastructure necessary to support this lifestyle will prosper. From chemicals to electricity, cement to milk, hundreds of thousands of Chinese companies are now competing to tap this torrent of money.

The Case for China

. . . China, along with India, is now the #1 destination for foreign investors—easily outpacing the United States.

. . . . A huge middle class is just getting ready to consume – maybe not at the level of US consumers – but at record levels for China

. . . Chinese government officials have finally bought into capitalism – at least, capitalism on communist terms.

. . . More and more Western companies, like IBM, Fidelity, Coca-Cola, McDonalds and many, many others are setting up shop in China.

. . . Global markets are skittish about the U.S. economy, not just on the short terms, but possible for the long term, and are looking to China.

For my money, one of the best places to park your money in China is in its mobile phone market. Right now, China is the global leader in the mobile phone market with an estimated 443 million mobile subscribers, according to Wireless Intelligence. Market growth in 2006 was 18% but slipped to 14% in 2007. Still, that easily surpasses the U.S. mobile market growth rate for 2007 of 10%. Plenty of phone makers like Samsung, Nokia and Motorola are making big money right now in the Chine market. Another play could be Hong Kong-based shipper, real estate and communications giant Hutchison Whampoa. Hutchison is controlled by Hong Kong billionaire Li Ka-shing (who owns 49.9% of the company). The company operates five core businesses in 36 countries, including ports and shipping; telecommunications and e-commerce; property and hotels; retail and manufacturing; and energy and infrastructure. It’s one of the world’s largest mobile communications companies too. And as shipping, tourism and mobile phone usage is booming in China, so are company revenues. It’s posted some mediocre numbers so far in 2008, but investments in mobile technology have been made and now the company is prepared to reap the benefits.

With company stories like these quite bullish, I think the Chinese mobile phone market will remain strong. Professor Yang Jianzheng, a business professor at Shanghai Institute of Technology, quoted in China's People's Daily, agrees. He points out that with the support of mobile payments, mobile e-commerce will provide personal information services, banking, business, shopping and entertainment in the coming years - advances that really haven't hit the China market - things will be jumping. He also says that the era of mobile e-commerce has quietly emerged; and predicts that China's mobile phone game market will reach 20 billion yuan in 2010.

Says People's Daily; "In the next two or three years, one-third of the 500 million Chinese mobile phone users will upgrade to high-end mobile phones loaded with games. It is expected that by 2010, users of mobile phone games in China will reach between 150- 200 million."

That's a hefty market by anyone's standards. As long as the U.S. markets are in turmoil, the Chinese mobile market is looking better all the time.