Dear Fellow Investor,

Have you been watcing the Winter Olympics? I must say that I've watched less of them this year than I usually do, and a lot of my friends tell me the same thing. I saw one story that said the TV ratings were down 36% from the Salt Lake City winter games four years ago.

I can tell you right now that the next Summer Olympics, in 2008, will be a much bigger deal. Why? Because they will be in China, and the world will be watching.

China knows it, too. The Beijing Olympics will be driven by a combination of national pride and government propaganda to show the world that a new China is emerging. Much like what the 1964 Olympics in Tokyo did for Japan, the 2008 Games will showcase China's newly gained economic and technological prowess—money will be no object, and no expense will be spared in making sure of it.

A World Showcase

The Beijing Olympics will serve as China's coming of age party in the 21st century, and it will be quite a spectacle. China sent 300 people to Turin, Italy, for the current winter games, yet only 70 are athletes. The rest are there to observe and bring back important information to make the 2008 summer games an unprecedented success. The summer Olympics are always bigger than the winter Olympics, but China is expected to spend more than 10 times what Turin did to prepare.

Beijing itself will spend an astounding $33.8 billion just on Olympic-related infrastructure like venues to host events, roads, parking, etc. As part of the cleanup, entire historic neighborhoods in old alleys (known as hutongs) are being reduced to rubble and replaced by colossal new structures. A lot of citizens are being displaced, but most are in favor of the changes, as the government is relocating them to housing elsewhere.

The incredible buildout and cleanup isn't just taking place in Bejing. This same scenario is being repeated in out-of-the-way places 1,000 miles from the games' center in Bejing. In fact, as the winter Olympics conclude this weekend in Turin, giant fleets of bulldozers and construction cranes are working around the clock to turn the Chinese coastal city of Qingdao into a modern Asia showcase.

A second-tier city mostly known for its popular Tsingtao brand beer, Qingdao will host the sailing and windsurfing events for the 2008 Beijing Olympics. In its bid to create "the best Olympic sailing regatta ever," Qingdao will be going all out to build five new highways, a new stadium, a new hospital, a "great" theater, a new sewage plant, a new sailing port, an international cruise terminal, an Olympic village and countless other projects in the next two years. These projects are estimated to cost at least $9.1 billion, and Qingdao city officials hope that the buildout will put the city on the map.

Considering that sailing and windsurfing are not exactly the most popular summer Olympic events, it is unlikely that Qingdao's vast investments and efforts will generate a worthwhile return. Yet city officials are using the 2008 Olympics as an opportunity to engage in a massive infrastructure buildout. On a smaller scale, cities throughout China are doing the same thing to get ready for the Olympics—even though most will not see any lasting economic growth as a result.

China has a lot riding on the 2008 Summer Olympics, both with the world and its own people. This makes it an event not to be missed, and I am already making plans to attend.

How to Profit: Your Invitation to a Special Event

Right now, the best way to profit from China's Olympic preparation is to play the massive buildout that will continue for the next two years. Demand for natural resources, which is already making supply tight in many cases, will continue to be exceptionally strong, and I see tremendous opportunity for us.

At the moment, there are two mining stocks I'm especially excited about because they are best-positioned to profit from this demand. I've recommended both to my China Strategy subscribers, and they are off to a great start here in 2006: One is already up 10%, and the other is not far behind at 8%. I fully expect these mining stocks will continue to benefit from China's Olympic dream, probably until sometime in late 2007.

Profiting from China's insatiable commodities demand is something we'll talk much more about in my first-ever teleseminar. As a valued Inside China Dispatch reader, please accept this invitation to join me for this special event. The seminar will take place Tuesday, March 14, from 4:00 to 5:00 p.m. EST. You'll be able to join me right from the convenience of your computer for a jam-packed hour that will include a chance to ask me your questions—live!

In addition to the great opportunity in mining stocks, we'll also talk about:

• Will Starbucks succeed in its massive China expansion?
• Is Colonel Sanders really China's most beloved general?
• What's the one China oil company you should own now?
• With a billion new consumers, massive new infrastructure opportunities and a new global boom, where do you start?
• Which stocks should you avoid at all costs?

And much more. I invite you to join me for a conversation that will help you understand how to get the best China stocks in your portfolio—without adding unnecessary risk. Click here for complete details. I look forward to talking with you on the 14th.

Upcoming Appearance

For those of you who live in the Los Angeles area, I will be speaking at the Santa Monica Public Library on Saturday. I'll talk about investing in emerging markets in general, and about the incredible opportunities presented by China's Chuppies. That's this Saturday, February 25, at 10 a.m. The Santa Monica Public Library is located at 2101 Ocean Park Blvd., at the intersection of 21st Street. Admission is free.

Last time I spoke there, I had the good fortune to meet about 30 readers. If you're able to come, I'd love to see you. And please be sure to say hello.

Sincerely,

Robert Hsu
Editor, China Strategy

P.S. Two types of stocks exist today. One type ignores China—it is going down. The other is focused and driven by the new realities of China—it is going up. Discover how to get the best China stocks in your portfolio without adding risk. Click here to sign up for my first-ever live teleseminar now! You'll also receive instant access to my newest Special Report: The Truth About China: 6 Ways to Double Your Money Safely in the Land of Promise. Reserve your spot today!