Time to Buy into China?

Overnight the Shanghai Composite rallied 2.7%, giving the Chinese stock index its biggest one-day surge in over 2 months. The rally comes after an 8% pullback in the index after testing a 52-week high in the middle of February.

The fears that China may be moving back into the "hard landing" scenario coupled with the government attempting to slowdown rising property values hurt the overall stock market. I find the hard landing argument tough to agree with considering growth should remain near 8% for China this year, one of the fastest growing nations on the planet. I do not find that anything more than a soft landing from even more robust growth.

Fundamentally the Shanghai Index is trading at 9.5x projected 12-month earnings, well below the seven-year average of 15.8, according to Bloomberg. The combo of an attractive valuation and a healthy pullback from the highs make the Chinese market extremely tempting at current levels.

ETFs to Play China:

• iShares FTSE/Xinhua China 25 Index ETF ($FXI)
• SPDR S&P China ETF ($GXC)
• Market Vectors China ETF ($PEK)