Power Play: Invest in Japan, not China

A pedestrian holding an umbrella walks past an electronic board showing prices of Japan's Nikkei average in Tokyo.
Yuya Shino | Reuters

The Shanghai Composite is down 20 percent in the past two-months, but it's still up 12 percent this year.

This has one global strategist concerned about the upside potential in China.

Jeff Hussey, global chief investment officer at Russell Investments, tells CNBC's "Power Lunch" on Monday he likes Japan more than China right now.

Read More Japan's inflation edges up as households shut their wallets

"We're neutral to slightly underweight China. Housing is starting to turn over. Growth won't be the 7 percent they were hoping for," Hussey said.

This makes Japan very attractive and Hussey is constructive to slightly overweight China's neighbor.

"I think the debt levels there are a drag on growth, but because of yen depreciation, Japan will continue to have good corporate earnings because of a weak yen," Hussey said.

The Nikkei is up about 16 percent year-to-date.