The man who co-founded the Quantum Fund with George Soros has left the US with his family and moved to Singapore. Meanwhile, the LA Times reports a growing wave of Chinese businesses are expanding into the US.

From Spartanburg to Los Angeles they are building factories, buying companies and investing in business and real estate.

Individually, these deals pale next to high-profile investments such as the $5-billion stake China’s sovereign wealth fund took in Morgan Stanley last year, or state-owned oil giant CNOOC Ltd.’s $18.5-billion bid to acquire El Segundo-based Unocal Corp. in 2005.

But unlike the suspicion or uproar those moves generated — CNOOC withdrew its offer amid U.S. political pressure, and the Bush administration and other governments have pushed for a “code of conduct” for sovereign wealth funds — private Chinese businesses such as Shanxi Yuncheng are being wooed by states hungry for investment and jobs.

“Jim Rogers thinks China will become the world’s next superpower,” says Tom Dyson, the contributing editor of DailyWealth.

“Rogers thinks the Chinese are the most capitalist people on earth. They save almost 35% of their income and don’t worry about how many vacation days they might get. Instead, they worry about how many days they are allowed to work.

“Jim Rogers is rarely wrong about these trends. We need to get our money into China soon. I’m going to wait for the Shanghai Composite to form an uptrend before I invest… It’ll improve my odds of making a profit. In the meantime, I’m going to keep researching Chimerica stocks.”

Tom has unearthed a great way to invest in China. Read on to learn how to profit from what Tom calls ‘Chimerica’ stocks.

Here’s the thing… Jim Rogers has a gift for exploiting sleepy markets no one else has thought of. He’s made money in Ghana, Botswana, Zambia, and Zimbabwe.

He put money into Uruguay before people “even bothered with shares,” Bolivia when the stock market was less than two years old, and Peru while it was still in a civil war.

And in Austria, Rogers made one of his biggest coups of all. In 1984, he noticed Germany was becoming an industrial powerhouse and was dumping its socialist politics. Austria is next to Germany. Rogers figured the Austrian stock market was ready for a boom…

He called a manager at Creditanstalt – Austria’s largest bank – and asked him how to invest in Austria’s stock market. The bank manager told Rogers Austria didn’t have a stock market. Austria’s market was so obscure, the manager of the country’s largest bank didn’t know about it. His ignorance was a buy signal for Rogers, who made 500% gains in three years.

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“You have not really been to a country,” he says, “until you have had to cross the border physically, had to find your own fuel, a place to sleep, until you have experienced it close to the ground. My success in the market has been predicated from seeing the world from a different perspective.”

Rogers thinks China will become the world’s next superpower. Last year, he sold his house in New York and moved his family to Singapore. He wanted to move to China, but said the pollution was too bad there. He’s using Singapore as his Asian base instead. “It’s like moving to New York in 1907 or London in 1807,” he says.

Rogers thinks the Chinese are the most capitalist people on earth. They save almost 35% of their income and don’t worry about how many vacation days they might get. Instead, they worry about how many days they are allowed to work.

“I recommend you all start to learn Mandarin,” he always tells audiences at investment conferences. “And tell your children and grandchildren to do the same.” Jim’s daughter has a Chinese nanny, who speaks only Mandarin.

In 2006 and 2007, Chinese stocks rose 500%. It was one of the most memorable bull markets in history. Newspapers published stories every day of Chinese taxi drivers and hairdressers making fortunes in the stock market. We read about queues of people waiting to open brokerage accounts.

Then the market collapsed…

Now I’m starting to get excited about China. I’ve been researching Chinese stocks that trade on North American exchanges. I call these “Chimerica” stocks.

I found some interesting agriculture companies. They do all their business in China, but they report in English and conform to U.S. regulations. These stocks have better valuations than Shanghai-traded stocks because so few people know about them. They even have better valuations than most of their American and Canadian peers.

Yesterday the papers announced Jim Rogers is buying China again. “All the panic looks like a bottom,” he told an audience at a conference in Beijing. “I have bought in the last four to five weeks. I’ve been buying shares in China for the first time in a long time.”

Jim Rogers is rarely wrong about these trends. We need to get our money into China soon. I’m going to wait for the Shanghai Composite to form an uptrend before I invest… It’ll improve my odds of making a profit. In the meantime, I’m going to keep researching Chimerica stocks, and I suggest you do the same.

Good investing,

Tom

You can buy shares of Wonder Auto on the U.S. stock market under they symbol WATG. They’ve shot up more than 600% in just the past two years.

Here’s the thing… If you live in Nevada, and you need a new starter or alternator… you can forget taking your car to Wonder Auto to get it fixed.

Why?

The company doesn’t have a single building here in the United States. Wonder Auto Technology does all of its work, and makes all of its profits, in China. It’s a China-founded, and China-based business.

Wonder Auto is an example of a type of investment I call “Chimerica” stocks.

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Chimerica stocks are Chinese companies. They do business in China, with Chinese management, Chinese employees, and Chinese currency. They make products for Chinese consumers.

Take China 3C for example. It’s the Chinese equivalent of Best Buy. China 3C sells consumer electronics from more than 600 stores in Eastern China. Or take Origin Agritech. It’s China’s equivalent of Monsanto. It produces genetically altered crop seeds like corn, cotton, canola, and rice. Both of these companies trade on stock exchanges in New York. China 3C’s stock symbol is CHCG. Origin’s stock symbol is SEED.

Chimerica stocks list in the U.S. because they can’t list in China or Hong Kong. “Going public” in China takes about three years. But in America, it only takes about six months. According to Barron’s, “Even now, for every company that goes public [in China] there are probably a hundred in the queue, and a lot of companies want money sooner rather than later.”

A shell company is a stock without a business. The business has no assets or operations, but it still has a name and a stock symbol. To list in America, Chinese companies find an American shell company and back themselves in. Lawyers call this a “reverse merger.”

Take United National Film Corporation. It stopped doing business in 2001 and became an empty shell. In 2007, United National Film Corporation “merged” with a company that makes turbines for Chinese power plants. Now this company’s name is Wuhan General Group and it trades under the symbol WUHN.

Chimerica stocks are the best way to invest directly in China. According to Barron’s, they sell for an average 10 times earnings. The price-to-earnings ratio of the Shanghai Composite – China’s main stock exchange – is 27. Chimerica stocks are cheap because Chinese investors cannot open brokerage accounts in the United States to buy these stocks. American investors don’t know about them. Analysts don’t cover them.

Another bonus: Because Chimerica stocks list on American stock exchanges, they must report their results in English, follow standard American accounting regulations, and comply with SEC rules.

There are about 100 Chimerica stocks. They range in market cap from a few million to a few billion. There’s no official record of Chimerica stocks, but I put together this list of the ones I know about.

I’m not ready to invest in China right now. The Chinese stock market is down 44% from its highs in October 2007 and is still in a downtrend. When the market turns around – which should happen later this year – I’ll pick my China investments from this list…

Good investing,

Tom

P.S. If you’d like to hear more about Chimerica – and other great ways to invest worldwide – consider coming on board to my International Strategist newsletter. One of my favorite ideas right now is “Commonwealth Shares.” Click here to learn more about them.