“I think the fundamentals behind China’s real estate market are terrific,” says Tony Sagami. Here, in The Asia Stock Alert, he looks an ETF that offers an easy way to play the trend.

“For several years, Chinese real estate has been red hot because of the biggest building boom in mankind’s history.

“I’ve seen estimates say as many as 70% of all the construction cranes in the world are on Chinese soil. Every time I go back, I see new buildings that weren’t there six months ago. The pace of construction is unbelievable.

“Compared to the U.S. market, where home sales and prices have been falling, the Chinese residential market has remained strong.

“That’s largely because 80% of all home purchases in China were bought with 100% cash last year. In other words, China simply doesn’t have the same sub-prime woes and default problems that we do.

“Paying all cash for a home may sound impossible to you and me, but we’re talking about a country that has a savings rate of 25% and many children living with their moms and dads until they’re ready to buy a home. So the forces that are pushing the U.S. economy down are not evident in China.

“According to the National Development and Reform Commission, China’s top economic planning agency, house prices in 70 large and medium-sized Chinese cities rose 9.2% in the second quarter from a year earlier. That’s on the heels of a 10.2% annual increase in May and an 11% increase in the first quarter of 2008.

“Property prices grew the fastest in Beijing (14.7%), Urumqi (20.2%), Haikou (18.1%), Ningbo (14.7%) and Hangzhou (13.3%). Compare that with the U.S. where home values declined in 12 out of the last 13 months , including the largest year-over-year decline in the history of the data.

“So if you want to keep some money in real estate, but are scared of the U.S. housing implosion, I suggest you cash in on the red-hot Chinese real estate market. One easy way is via an exchange traded fund such as the Claymore AlphaShares China Real Estate ETF.”

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