Fear Not China's Real Estate Market In 2010 (TAO)

It will be hard to watch China in 2010 without paying some attention to the country's booming real estate market. To be sure, there are fears of a speculative bubble that may burst, costing investors dearly in the process.

Beijing seems torn between preventing a rapid rise and subsequent collapse of its real estate market and not crimping credit, which would curb development.

The solution seems to be a possible mandate from Beijing that would encourage the development of more low-income housing and that could be a boon for the Claymore/AlphaShares China Real Estate ETF (NYSE: TAO) in 2010.

Many of TAO's top holdings are property development firms which will benefit from increased construction. These companies don't necessarily need prices to be high to see a pop in their bottom lines, they just need to bring more products to market.

So TAO may a contrarian play of sorts. Investors may get pensive if China's real estate market experiences a rapid decline in prices, but that may present investors with the oppportunity to buy TAO on some dips.