Don’t allow yourself to be bombarded by bearish headlines such as on “China’s hard landing for year 2012″. At the same time, do not resent the China story. Embrace it. And one of the best ways to do that is to invest in the Hong Kong stock market Hang Seng “H” Shares.

Here are the bottomlines.

• China is transforming itself from a world-class exporter into one of the world’s biggest importers despite the country’s authoritarian government and problems within the banking sector, the investment outlook in China remains promising.

• China already imports nearly as much as it exports, over $1 trillion of goods annually. Chinese consumers now buy more automobiles than Americans do. Oil production there is massive – and it still meets only half the country’s needs. Here is an counter that wud benefit is China National Offshore Overseas Corporation. CNOOC (0883.HK). Click link for CNOOC news.

• China is also the world’s second-largest consumer of luxury goods. Prada.HSI (1913.HK) and Coach.HSI (06388) are both listed in Hang Seng. Click link for Prada.HK news.
• Tens of millions travel abroad, too. It’s estimated that 54 million Chinese tourists vacationed overseas last year.

Consumers in China are busy buying homes, computers, mobile phones, appliances, financial services and healthcare. Plenty of money will be made in those sectors in the months and years ahead.

Hang Seng Market has been beaten down bad.

(Note: YTD down – negative 21% loss into bear market definition for HSI & negative 22% loss for Shanghai Indec)

The prospects for the Hong Kong market remained good & will benefit from the growth of China’s economy. Hong Kong imposes no duties on imported goods. There are no capital controls. Procedures for starting a business are simple. There are no sales taxes, payroll taxes, or value-added taxes. And Hong Kong offers taxpayers a 16% flat tax on income, with no taxes on dividends or capital gains.

We have investors asking if their dividend income wud be taxed at all. Well here is the answer – NO.

With China’s rapidly growing middle class, these areas should be excellent investments over the next few years. The bear market for Hong Kong and China may not last long before we see resumption of a bull market again.