"Just a few months ago China was preventing the economy from overheating; with amazing speed, the government has changed from jamming on the brakes to hitting the gas with both feet," says Jim Trippon.

In The China Stock Digest, he says, "Chunghwa Telecom (NYSE: CHT), the big gun among Taiwan’s telecom, continues to impress us as a source of reasonable growth and excellent dividend income."

"New economic stimulus efforts are being launched from Beijing with breath-taking speed and regularity, underlining once again the government’s ironclad determination to keep the economy growing as quickly as possible.

"One favorite investment idea is Chunghwa Telcom, which offers a hefty dividend yield just shy of 7%, along with a solid outlook of maintaining its yield, given the company’s pre-eminent status in Taiwan’s telecom community.

"Chunghwa is an integrated telecom giant with a fully developed domestic infrastructure as well. Formerly a government directorate, Chunghwa was spun off in 1996 holding an immense legacy of Taiwanese customers and an international infrastructure.

"We’re impressed that Chunghwa continues to find and exploit new revenue sources. As the company persistently expands data and DSL sales, Chunghwa continues to be the leading mobile operator in Taiwan in terms of both revenue and subscriber market share.

"Chunghwa has decided to invest $4 billion over the next five years to upgrade its fixed-line and mobile networks in order to enhance long-term revenues.

"The company will build new fiber optic fixed-line networks and expand its mobile networks and undersea cables. It s also involved in a trans-Pacific partnership that will make it a player in the explosion of Internet service to the Chinese mainland and the Greater China region, including Taiwan and Hong Kong.

"Through a deal with Verizon Communications and five Asian partners (one of which is Chunghwa), the consortium will build a $500 million high-speed undersea cable linking the United States and China.

"Chunghwa appears to be a relatively low risk investment. Taking into account Chunghwa’s reasonable valuations and historically low volatility for a telecom stock, the company seems poised to be a reliable earner for the long run.

"Chunghwa Telecom remains Taiwan’s most profitable telecom carrier. It enjoys a P/E multiple of 11.7, an attractive figure for an expanding telecom company. At its current share price. Chunghwa is selling only a few percentage points above its book value, making it a solid value play in these volatile times."