Dear Fellow Investor,

Happy Thanksgiving! I know it's a day early, but with the markets being closed for the holiday, I wanted to touch base before we're all in a turkey-induced coma…

It's truly been an interesting year so far, as we're not only in the midst of the worst financial crisis since the Great Depression but also an economic slowdown of global proportions. And, as a result, we've watched global stock markets sell off by record -- and historic -- amounts.

Special Thanksgiving Offer!

What a year it's been! We're truly in the worst financial crisis since the Great Depression, and as a result, we've watched the global economy dramatically slow down and stock markets plunge lower. There's now denying that it's been tough, but I don't want you to lose sight of the tremendous investment opportunities that China still has to offer. And as a valued Inside China Dispatch reader, I don't want you to miss a single profitable opportunity. So I'd like to extend a special invitation for you to join China Strategy for the low, low price of just $99 for one year! Or you can lock in your subscription for two years for only $199! But you must act fast – much like a Black Friday deal, this special $99 offer expires. After November 30, this special deal will disappear. So join China Strategy today!

So there's no denying that we're in one of the toughest economic and investment environments of our generation. And I'm sure that many of you are wondering how China will fare in this rapidly deteriorating economy.

Well, I'm expecting China to weather the storm, as Chinese policymakers are focusing on stimulating economic growth. As we discussed before, the only way for a country to overcome an economic slowdown is to grow its way out. And for China to do just that, Chinese policymakers need to focus on the two primary drivers of growth in the country – domestic investment and consumption.

A couple weeks ago, we discussed how the Chinese government is focusing on domestic investment with its $586 billion stimulus plan. This package not only strives to boost economic growth through the creation of jobs, it also dedicates a large portion of the funds ($18 billion) to low-rent housing, infrastructure in rural areas, roads, railways and airports.

Domestic investment should generate around 4% GDP growth next year. Aside from domestic investment, though, domestic consumption will be the other strong driver of growth in 2009 -- likely contributing to 3% GDP growth.

My China Strategy portfolio is aligned to take advantage of China economic strength -- it's particularly focused on companies set to profit from China's focus on domestic investment and consumption. Learn how you can profit from this trend, as well -- join China Strategy today.

The Strength of the Chinese Consumer

If you've been reading my Inside China Dispatch for a while now, then you've probably heard me discuss Chuppies before. Chuppies are young, affluent Chinese professionals that have grown into a mass consumer class over the past few years. And I believe this demographic group will keep China's economic growth engine chugging along for years to come.

Here's why…

First, you must consider that the highest growth in personal income is occurring in the 20- to 30-year-old segment of the Chinese population -- the Chuppies. In the past year, this demographic group experienced income growth of around 10%, and it is on track to gain again next year.

Second, this is perhaps the most fortunate generation in Chinese history. That's because many of these young adults are only children, and have been pampered by parents and grandparents. What also makes them fortunate, is that the Chuppies grew up during China's economic emergence, so they've never experienced the abject poverty that many older Chinese generations lived through. So they're not afraid to spend money.

Thirdly, this demographic group is Internet savvy, learn quickly and are confident as well as sophisticated. And that's why the Chuppies have been such a powerful force in the Chinese economy in recent years.

Where to Invest

Now, despite the strength of the Chuppies, Chinese consumers are still going to cut back on unnecessary expenditures, much like the U.S. and Europe. But, we need to remember that Chinese consumers still have a lot of money to spend -- since China's average savings rate is 30%. They're just going to cut back on vacations, eating out in mid-priced restaurants and shopping for gadgets, like cell phones and iPods.

Still, Chinese domestic consumption will remain robust. While they won't be spending their hard-earned cash on unnecessary items, they'll still be shelling out their money for the necessities -- think health care and their children's education.

As Chinese re-prioritize their spending, we're going to see companies inline to benefit from this increase in necessity spending. In my China Strategy service, we've already adjusted our strategy to take advantage of these growing trends. Medicine and education companies, in particular, will profit in the months ahead.

Right now, two of my favorite companies fall in these sectors…

• China's Number 1 Medical Devices Manufacturer: This Chinese company has taken the reigns of the medical device and laboratory instrument industry in China, and it is currently expanding its reach around the globe. And the company is in a dominant position in the sector, which makes it a beneficiary of industry consolidation and increasing government healthcare spending in China.
• China's Leading Education Services Company: Since education is such a top priority for the Chinese, this company will continue to profit despite a global economic slowdown. In fact, at a time when all of China was focused on the Beijing Olympics, this company still added 23.8% in student enrollments. And it's gained 83% since I recommended it.

Learn more about these two companies -- join China Strategy today!

A Bountiful Harvest

As you can see, the Chinese consumer has been a strong driver of growth in China over the past few years, and I'm expecting the strength of domestic consumption to insulate the country from the global economic slowdown.

But I'm not expecting every Chinese company to bounce higher in the months and years to come. And that's why it's important to understand exactly what's happening in China today, and which companies are going to profit from the major trends in the country right now.

So to ensure, you're not missing a single opportunity, I have a special Thanksgiving offer for you today. Join China Strategy now for just $99 for one year!

Happy Thanksgiving!

Robert Hsu