Look at Global Names to Make Money in China: Strategist

China's rapid growth in recent years has sparked various ways for investors to cash in. One fund manager says he is starting to look at global consumer stocks as a way to invest in the mainland.

Paul Gambles, Managing Partner of financial advisory firm MBMG Group told CNBC that while commodities such as oil, gold and commodity-related stocks have been a successful way to invest in China in the past few years, he has now turned to "global stocks, global franchises, global brands that are listed outside China".

He likes U.S. listed stocks such as Yum Brands and Caterpillar , which despite being American companies, derive a large part of their revenues from China. "Yum Brands gets two-thirds of its revenue from outside the States these days, the biggest part of that is in China," he said.

Gambles argues that investors would be better off investing this way because China still remains a "very closed market in terms of finance" and it is "not ready to import huge amounts of capital" as it tries to curb hot money flows.

In addition, he said China's "command economy" was not desirable for investors. "You don't want to be investing somewhere where your return on capital is largely controlled by the government."

As such, "direct ownership of Chinese stocks and Chinese assets is something that is very difficult for foreign investors to get a decent return on right now," he said.

Michael Kurtz, Head of Regional Strategy at Macquarie Securities, agreed with that view. "China is still very gradualistic in terms of how much foreign portfolio capital its allowing into the domestic share market."

Kurtz points out higher wages will not just be beneficial for consumer stocks as China's population spends more, but also for capital goods and machinery stocks.

"Higher wages (are) going to create incentives for Chinese companies to begin investing in more capital intensive technology. In other words, you raise the capital to labor ratio by adding more automation, factory equipment, factory controlled technology," Kurtz explained.

He recommends names such as Siemens in Germany, and Fanuc, Omron or Mitsubishi Electric in Japan.

Disclosure: Paul Gambles does not have personal holdings in Yum Brands or Caterpillar. MBMG Group does not have direct holdings in these 2 companies.

Michael Kurtz and Macquarie Securities do not have holdings in Siemens, Fanuc, Omron and Mitsubishi Electric.