Chung takes a different view of government intervention than others do. "Government control of the Chinese economy allows the country to act quickly and follow through. I see it as a positive rather than a problem." He believes the government will loosen the reins sometime this summer once inflation appears to be under control.

The World Bank expects consumer prices in China to rise by 3.7% on average this year before they slow down to 2.8% in 2011. "You can't compare acceptable levels of inflation in the U.S. to emerging markets like China, where an inflation rate of 4% or 5% is quite acceptable," says Chung, who believes the government will ease up on its tightening policy before the summer is over.

He believes an easing of monetary policy would provide new wind for China's bull market. "Even though Chinese companies have been seeing strong revenue and earnings growth, the markets have been weighed down by the overhang of government intervention," he says. "Once the government stops further monetary tightening, I believe the Chinese market will come back with a vengeance."

Whether a buoyant Chinese market will have a spillover effect into other stock markets remains to be seen. "I'm leaning toward betting that will happen," he says. "Most of the inflows into mutual funds recently have been into bond and money market funds. There is a lot of liquidity left in the market that can be used to buy U.S. stocks. And based on our analysts' research and analysis, we see corporate earnings delivering solid growth this year. "

That would have a positive impact on the fund, since about one-third of its assets are invested in U.S. stocks. About 25% of the fund's holdings are companies based in China itself; Hong Kong holdings are 21% and Taiwan's are 11%. The fund parameters have led it to make a hefty investment in information technology companies, which represent 29% of assets, followed by financials at 15% and industrials at 21%.

A company doesn't necessary have to generate a specific percentage of revenues from China to qualify for the Fred Alger fund. Apple, for example, is one of its holdings even though the company has minimal sales in China. The reason is that the technology company benefits from China's low labor costs. "Very few larger companies derive a huge percentage of revenue from China, so we need to look at all sides of the equation," Chung says. "Sales are only part of it. Companies can achieve lower costs and improve profit margins through operations there as well."

Other U.S. companies, such as fund holding United Parcel Service, have a more direct China connection. UPS, which now operates in more than 200 cities in China, is unique in the complex delivery business and is aggressively building out its operations in growing markets, including China's.

Mindray Medical International, the largest manufacturer of health-care equipment in China, also appeals to Chung. While about half of its sales are in China, the company also has a strong presence in those emerging markets that are in the early stages of ramping up their health care facilities. "Amidst the focus on trade and technology, investors tend to forget about the underdeveloped infrastructure and health care needs of those markets," he says. "Yet those markets have enormous potential for growth."

Since China's role in providing health care has receded in the free-enterprise era and private insurance is rare, people must often pay for health care from their own pockets. It's a similar situation in developing countries such as Brazil or India. "You have to understand that a hospital operating in a rural clinic without tech support staff can't afford a $2 million piece of equipment from a U.S. manufacturer," Chung says. "Many American companies have to redesign equipment to get it to the right price point. Mindray's equipment provides what they need in a cost-efficient manner."

A company's potential for high unit volume growth, such as Mindray's, is just one of the qualities originally sought by Fred Alger, who founded the firm in 1964. Chung and his co-workers at Alger also look for companies undergoing dynamic changes-garnering stronger profit margins or rising cash flow, for instance, or benefiting from new products that can initiate new growth phases.