The Summer Olympics are only days away and what the Chinese had hoped would be their coming out party to celebrate all that is good, may instead become quite the opposite.

The air pollution in Beijing is so bad that even reducing automobile traffic by 50% has not helped much. China is now considering a 90% reduction according to news reports. Athletes are staying in other countries until the games begin so that they may train somewhere they can breathe. There are also reports that many athletes involved in stamina events will be forced to wear masks to protect themselves from the particulates in the air.

Now Reuters is reporting that "Some International Olympic Committee officials cut a deal to let China block sensitive websites despite promises of unrestricted access, a senior IOC official admitted on Wednesday."

So the world media will not be able to do their jobs in a manner they are accustomed to. But who are we actually referring to? Western media, of course, because half the world still limits access to information to some degree.

China is now the home of eight of the world's 20 most valuable companies based on market cap. The U.S. is down to seven. The list is made up of all companies with market values in excess of $200 billion.

As The New York Times points out, "The list of the world's most valuable companies in 1989 was dominated by the Japanese banks, whose profits were enhanced by their stakes in many other Japanese companies whose shares were also soaring. After Japan's bubble burst, those banks were brought down by bad loans, leading to mergers and bailouts."

Is the Chinese market going to go the way of Japan's? The answer is probably yes.

The value of some of the current Chinese companies is simply too rich, even if the country's economy is growing at 10% a year. If there is a global recession, the demand for Chinese exports is likely to move down, which could throw the country's entire economy into chaos.

The market has turned since my last video update -- with the Fed's recent interest rate cut, now is the time to embrace your inner bull! I discuss buying strategies in this edition of StockWatch: Between the Bells.

Three stocks you should look into:

• First Solar Inc. (NASDAQ: FSLR), a Phoenix manufacturer of silicon-free solar-power modules. FSLR is significantly undervalued, by as much as $40 if you believe Bank of America.
• China Medical Technologies (NASDAQ: CMED), which develops cancer treatments in Beijing. CMED is expanding its operations into the rest of Asia, as well as into Russia and Europe.
• After stalling a bit last month, Google (NASDAQ: GOOG) is pushing higher again, bound for $600.
  

Stay away from home builders like Hovnanian (NYSE: HOV) and Beazer Homes (NYSE: BZH) -- the ongoing mortgage meltdown is not over, and the housing market has yet to bottom out. Until then, also avoid home furnishings retailers, like Ethan Allen (NYSE: ETH).

Lastly, check out Baidu (NASDAQ: BIDU), China's leading search engine -- currently trading at $275 and soon to hit $300. Don't think that Google is considering a Baidu buyout? Think again.

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