According to the Financial Times, the Chinese Ministry of Information and Industry Technology called for a crackdown "on illegal VoIP (voice over Internet protocol) telephone services" and is collecting evidence for legal cases against them.

China is a big player in most markets; however, when it comes to technology, powerful local companies hold sway. Last year Google (GOOG) fought a battle to keep its website in China. A couple of years ago, China set rules whereby all Internet content had to pass through censors before being approved.

It seems excitement about Apple's (AAPL) iPhone is truly global, as demand for iPhone 4 handsets has outstripped supply, according to China Unicom (CHU). Sales of the popular smartphone, which launched in China Saturday, came at a faster pace than sales of previous versions.

More than 1,000 people waited, some for two days, outside the new Apple Store that opened in Xidan Joy City shopping mall on Saturday to get their hands on the new toy.

While Apple's (AAPL) iPad has been a smashing hit, there is an onslaught of competitors gunning for the market. These include Windows 7 slates and also $35 Indian tablets. There's even buzz that Research In Motion (RIMM) will come out with the BlackPad.

So, to keep up its lead, Apple is working furiously to build supply as well as penetrate new markets. And yes, it looks like the company will move into China, perhaps as early as next month. To this end, China Unicom (CHU) will be the exclusive carrier for the iPad. This will also include the distribution of the highly popular iPhone 4.

Apple (AAPL) saw limited success in China when it recently debuted its iPhone there. Although the Chinese really weren't all that impressed by the device's requirement of an expensive calling plan from Apple partner China Unicom, the iPhone has sold fairly well since its debut. Or, it has sold poorly depending on your perspective.

In two months, China Unicom has sold a little over 100,000 Apple iPhones. Compare that with China Mobile, China Unicom's largest competitor and the largest mobile carrier in China, which apparently doesn't feel threatened by the lackluster sales performance of the iPhone. Indeed, a mobile market with a 1.3 billion potential customer base and the comparison of 100,000 handsets sold for a device that has seemingly revolutionized the entire mobile industry don't appear to belong in the same sentence, right?

"China is the world's biggest market for telecom services," notes Geoffrey Seiler, in an in-depth review of the leading Chinese telecom and wireless phone companies.

In his BullMarket.com, he looks at "China Mobile (NYSE: CHL), China Unicom (NYSE: CHU), and China Telecom (NYSE: CHA) noting,"There is still a lot of wireless growth potential in the world's most populated country. As such, we would expect all three to continue to grow for the foreseeable future."

Seiler explains, "China Mobile is the undisputed king of mobile from a subscriber base standpoint. Through the end of June, the company boasted 493 million subscribers. The company boasts 70% of the Chinese market.

U.S. stock markets are poised to rise today as more and more positive data convinces Wall Street that the economic recovery is for real.

Futures for the Dow Jones Industrial Average, the Nasdaq Composite Index and the S&P 500 Index were all indicated higher following a rally in overseas markets. Germany's Dax, France's CAC-40 and the U.K.'s FTSE 100 all posted strong gains. Japan's Nikkei 25 also rose while China's Hang Seng declined.

For those looking for silver linings, there are plenty to choose.

"China Unicom (NYSE: CHU) could be one of the best ways to play China's astounding economic growth," says Brandon Clay in Invest with an Edge. Here's the growth advisor's review.

"With the world's largest population as its market, the mobile phone industry in China is set to soar. This makes China Unicom a compelling play. The firm has 21% market share in China.

"China Unicom's vice president recently said the company is targeting subscriber growth of 20 million to 30 million within a year. To put that into context, Verizon Wireless, the largest mobile phone carrier in the U.S., had 72.1 million subscribers at the end of last year.

This post is part of a 12-article feature on the best bets for investing in China. To see all the other recommendations in this special report, click here.

"Holding both of China's largest wireless carriers -- China Mobile (NYSE: CHL) and China Unicom (NYSE: CHU) gives investors something of a hedge in the event that one company takes a large amount of business from the other," says China expert Jim Trippon.

In his The China Stock Alert, he adds, "Although this is a safety measure for investors, we don't expect massive erosion in either company's subscriber base as the telecom sector and 3G service continue to expand in China.

Those surprised by the market's strength in recent weeks should be even more impressed with the rebound in China, where both their market and economy have proven among the most resilient in the world.

Global specialist Nicholas Vardy adds, "While the US markets are rising, Asian stocks are on fire." ETF expert Paul Tracy adds, "China funds have screamed to the top of the performance charts."

In large part, this strength is due to the country's stimulus program. Tracy points out, "To combat the sagging global economy, Chinese Premier Wen Jiabao orchestrated a massive 4 trillion yuan ($586 billion) stimulus package.

This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.

"China Unicom (Hong Kong) Ltd. (NYSE: CHU) is our top investment pick for 2009," says Jim Trippon, China expert and editor of The China Stock Digest.

The advisor explains, "China Unicom is involved in the cellular telephone business in 31 provinces, municipalities and autonomous regions in China. The company is also a major provider of data and Internet services in the People's Republic of China.

"We like the fact that this company is dependant on local Chinese customers and is fairly well insulated from the global economic downturn.

"We have selected China Unicom as our top pick for 2009 based on valuation. The China Stock Digest uses a Warren Buffet/Benjamin Graham style of stock picking.

Analyst upgrades:

• PepsiCo (NYSE: PEP) was upgraded to Buy from Hold at Deutsche Bank.
• Fortress (NYSE: FIG) was upgraded at Citigroup to Hold from Sell.
• Prudential (NYSE: PUK) was lifted to Overweight from Neutral at JP Morgan.
• Keefe Bruyette upgraded Franklin Resources (NYSE: BEN) to Outperform from Market Perform and added shares to their Best Ideas List on valuation as they see an attractive risk/reward at current levels.
• UBS upgraded ASML Holding (NASDAQ: ASML) to Buy from Neutral on valuation as they believe the company remains a market leader.
• Oppenheimer raised Seattle Genetics (NASDAQ: SGEN) to Outperform from Perform on valuation following the recent weakness as they expect positive clinical news flow beginning in December.

• UBS downgraded U.S. Steel (NYSE: X) to Sell from Buy and lowered its target to $30 from $60 citing deteriorating U.S. conditions and concerns about the company's high fixed costs in a falling steel price environment.
• Royal Dutch Shell (NYSE: RDS.A) was downgraded to Underperform from Neutral at Credit Suisse.
  
• China Unicom (NYSE: CHU) was lowered to Underweight from Neutral at JP Morgan.

MAJOR PAPERS:

• Chip suppliers for cellphones including Qualcomm Incorporated (NASDAQ: QCOM), Texas Instruments Incorporated (NYSE: TXN) and Nvidia Corporation (NASDAQ: NVDA) are moving aggressively to make products for Intel Corporation's (NASDAQ: INTC) new breed of pocket-size portable devices, called MIDs, the Wall Street Journal reported.

• According to the UK Times, Barclays Plc (NYSE: BCS) and The Royal Bank of Scotland Group Plc (NYSE: RBS) were raided by the Office of Fair Trading as part of the investigation into price fixing loans to professional services firms.

• Almost three dozen of the largest U.S. companies may have to slash their dividends, since the dividends greatly exceed their cash flow, Bloomberg reported. Large companies in this situation include General Motors Corporation (NYSE: GM), Motorola Inc (NYSE: MOT), and The New York Times Company (NYSE: NYT).
• China Telecom Corporation Limited (NYSE: CHA) may announce today that it has bought the mobile phone assets of China Unicom Limited (NYSE: CHU) and its parent company for more than $14.4B, Bloomberg reported, citing the South China Morning Post. China Unicom could say that it is merging with China Netcom Group Corporation (NYSE: CN) as early as today, the newspaper added.