Power Play: Bet on China, but remember the risks

An investor smiles during his observing stock market at an stock exchange in Fuyang, Anhui province of China.
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The Shanghai Composite is up 53 percent this year despite concerns about a slowdown in China, leaving many strategists wondering if there will be a market crash.

Long-time China watcher Michael Holland, chairman of Holland & Company, tells CNBC's "Power Lunch" on Wednesday there's no question there's growth in China, but you have to know how to invest. There are pockets of bubbles in China, but Holland says it's a mistake to bet against Chinese leaders who are committed to preventing a hard landing.

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"They will correct, many of them will crash, but that's only one portion of the stock market," Holland said.

He believes the key to investing there is avoiding index funds and finding the right active manager.

"If you find a good fund manager in china, you can potentially have a bright future," Holland said.

The Shanghai Composite is up more than one percent during trading.