How To Trade China's $200 Billion Home Building Plan

In a move to fight soaring real estate prices that the government blames on speculators, China will invest nearly $200 billion into affordable housing this year.

Although the county's economy continues to grow, rising real estate prices have put homes further out of reach for more of China's lower income workers.

The plan calls for the building and renovation of 10 million low cost homes. The total investment will be 1.3 trillion yuan ($198 billion), with 500 billion yuan coming from central and local governments and the remainder of the funds coming from public institutions and businesses.

The move is just the latest in a series of measures being used to cool China's housing market. Other controls that have been introduced include raising down payment requirements and introducing property taxes used to cut into the profit of property sellers.

The Global X China Materials ETF CHIM is an ETF that could benefit from increased home building in China. This ETF (CHIM) gives access to the Chinese materials and commodities sector that would benefit from increased home building and the purchase of consumer appliances and furniture associated with it.

Investors who are interested in Chinese real estate should take a look at the Guggenheim China Real Estate ETF TAO. This ETF seeks investment results that correspond generally to the performance, before the Fund's fees and expenses, of an equity index called the AlphaShares China Real Estate Index, which is designed to measure and monitor the performance of the investable universe of publicly-traded companies and REITs deriving a majority of their revenues from real estate development, management and/or ownership of property in China or the Special Administrative Regions of China, such as Hong Kong and Macau.