Dear Fellow Investor,

I'm back! Yesterday, my flight landed in Los Angeles, and immediately, I started compiling my research and findings from my 10-day tour of five Chinese cities -- Beijing, Shanghai, Shenzhen, Hong Kong and Macau.

In general, our observations in these Chinese cities indicated that the country is in the beginning of an economic recovery. And my recent trip confirmed my belief that the Chinese economy is on track to fully recover in the second half of 2009.

Here's what I discovered and why I believe China is on the road to recovery:

Beijing: A City of Economic Strength

The capital city in China continues to show strong economic strength, with business being conducted as usual and Chinese consumers still spending. What was interesting, though, is that were more Chinese filling up the high-end restaurants and clubs in Beijing, rather than non-Chinese patrons.

Popular venues, like the Lan Club -- a Philippe Starck-designed eatery in Beijing's Central Business District -- were packed with largely local clientele that has replaced the foreign business executive crowd as the restaurants' main customers. This change in clientele comes as Beijing's upper class is expanding.

The expansion in Beijing's upper crust is due to the Chinese government's stimulus package and increase in bank lending. The Chinese government is pumping funds into state-owned enterprises (SOEs), which is leading to pay raises and bonuses.

But Chinese citizens aren't the only ones benefiting from this influx in cash. Much of the funds from both the stimulus plan and bank lending are falling into the hands of SOEs, supporting these companies in the current economic environment. As a result, we've seen some profitable opportunities in China's SOE's.

My China Strategy subscribers are benefiting from this trend in two ways: 1) Investing in a closed-end fund consisting of mostly Chinese SOEs listed in Shanghai – it's up a whopping 68% year to date; and 2) Investing directly in SOEs benefiting from the Chinese government's support. Take a look at how some of our top SOE recommendations in China Strategy have fared year to date:

• The largest airline in China, up 42%
• The leading producer of aluminum and alumina in China, up 39%
• China's number-one offshore driller, up 18%
• A leading insurance provider in China , up 14%

And that's just the beginning of the profits that my China Strategy subscribers will experience this year with this strategy. With the Chinese economy on track to recover fully in the second half of the year, these companies are set to soar even higher in the months to come.

Don't miss out on the next round of profits. Join China Strategy today!

Shanghai & Shenzhen: A Booming Real Estate Sector

The cities of Shanghai and Shenzhen are also benefiting from the Chinese government's stimulus plan and the increase in bank lending. But we're mostly seeing this play out in the real estate sector, since Shanghai and Shenzhen economies are supported more by private businesses than SOEs.

Real estate developers were previously short on cash, but now they are receiving much-needed funding and construction loans to complete their projects. This is creating a surplus of housing, which is causing home prices to drop and drawing out pent-up demand from buyers.

With more than 70% of the Chinese population still living in overcrowded, outdated housing, there is strong demand for housing in China. And now that many Chinese have disposable income and because home prices are dropping, many Chinese are coming into the market to buy a new home. In fact, home sales in March nearly doubled from the previous month.

The property sector is one of the most important segments of the Chinese economy, and its strength bodes well for a strong economic recovery for China in the coming months. That's because a recovery in China's real estate sector provides employment opportunities and general economic growth. And, of course, the strength of the Chinese real estate sector leads to booming business for my China Strategy real estate services company and other residential brokerage firms.

Last week, I provided an in-depth look at my favorite Chinese real estate services company. For more details on how the company is faring, be sure to review the April 23 Inside China Dispatch. Let me just say this, though, this company is directly in line to profit from the recovery in China's real estate sector. And its shares are already rallying higher -- up a whopping 95% in the past two months!

It's not too late to jump on board. The company's stock is still trading at cheap levels, and it's a great bet on much higher prices later this year. Join China Strategy today to start profiting from China's improving real estate sector.

The Road to Recovery

As you can see, there are exciting things happening in China today. And after my recent 10-day tour of China, I'm convinced that the country is in the beginning of an economic recovery. Outside of exports, the Chinese economy continues to exhibit robust growth with government-controlled and domestic consumption sectors showing strength and supporting the economy.

That's why I believe the Chinese economy will fully recover in the second half of this year, and continue to provide us with incredible opportunities to profit from its strength. And for investors who are tuned in to the booming industries there and the companies profiting from government support, there's a wealth of money to be made.

In fact, I'm recommending a new company to my China Strategy subscribers today. This company is benefiting from China's move to digital television, and it's set to hand investors more than 50% profits by year end.

Don't miss out on this incredible opportunity! Join China Strategy today!

If you join us today, you'll have direct access to name and buy advice for the major China ETF that has handed subscribers 68% profits this year, my basket of SOEs that have delivered double-digit gains so far this year, the real estate company up nearly 100% in the past two months, and my most recent recommendation set to soar at least 50% this year.

Don't delay -- Join China Strategy now!

Sincerely,

Robert Hsu