×

Power Play: Cautious Case for Investing in China

Beijing's Forbidden City
Kylie Mclaughlin | Lonely Planet Images | Getty Images

China is on fire, with the Shanghai Composite up 22 percent this year and the Hang Seng up 15 percent.

But before you rush out to buy Chinese stocks, a word of caution from Stephen Freedman, senior investment strategist at UBS Wealth Management.

Emerging markets is the "only block with an underweight. It's not really a bearish outlook, but an offset of overweight in the U.S. and the euro zone," Freedman told CNBC's"Power Lunch" on Thursday.

Read MoreHong Kong stocks: It's now or never

He believes China will see weaker growth this year than in 2014. It is "a controlled deceleration by the government. The economy may grow below the target of 7 percent," Freedman said.

The Shanghai Composite fell about one percent on Thursday, while the Hang Seng rose nearly 3-percent.