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Hot Spot in Cooling China

Again new data out of Beijing suggested that China’s once robust economy was facing some serious headwinds.

Foreign direct investment in China fell 8.7 percent in July, the government said on Thursday, a ripple from the European debt crisis.

“Broadly, China’s growth will be very subdued,” says Credit Suisse head of the global capital goods research Julian Mitchell on CNBC’s Fast Money Halftime Report.

However, he says despite the nation’s slowing growth there is an area of the economy that’s about to take-off – factory automation.

Because China is facing real wage inflation, he says “Factory managers will be compelled to use hardware and software to replace labor.” In other words, manufacturing companies will have no choice but to invest more in the automation of their plants.

And that he says benefits three companies that trade here in the US; Rockwell Automation, Emerson and Siemens . (Mitchell also identifies overseas companies that trade on other exchanges. Check out the video for those.)

Of all the names listed above, trader Stephanie Link, director of research at TheStreet, tells us that her favorite is Emerson. “They’re doing a decent job in a tough environment,” she says. I’m a buyer under $50.”

Posted by CNBC's Lee Brodie

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Trader disclosure: On August 16, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Brian Kelly is long TGT; Brian Kelly is long XHB; Brian Kelly is long GLD; Brian Kelly is short DLTR; Brian Kelly is short DG; Brian Kelly is short FDO; Mike Murphy is long AAPL; Mike Murphy is long SBUX; Mike Murphy is long TWI

For Deborah Weinswig
Within the past 12 months, Citigroup Global Markets Inc. or its affiliates has acted as manager or co-manager of an offering of securities of TGT
Within the past 12 months, Citigroup Global Markets Inc. or its affiliates has acted as manager or co-manager of an offering of securities of DG
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as investment banking client(s) WMT
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as investment banking client(s) M

For Julian Mitchell
I, Julian Mitchell, certify that (1) the views expressed in this report accurately reflect my personal views about all of the subject companies and securities and (2) no part of my compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report.
The analyst(s) responsible for preparing this research report received compensation that is based upon various factors including Credit Suisse's total revenues, a portion of which are generated by Credit Suisse's investment banking activities.

For Mark Hawtin
GAM is long AAPL
GAM is long FB
GAM is long MSFT
GAM is long GOOG
GAM is long STX

For Porter Bibb
MediaTech is long AAPL


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