No sector of the stock market could be hotter than "China" stocks. Recently, I wrote about an innovative Chinese company, American Oriental Bioengineering Inc. (AMEX/AOB).

This company is in the business of developing and selling plant- based pharmaceutical products and plant-based nutraceutical products that it distributes throughout China and Asia.

There's no doubt that AOB is a pure risk-capital investment opportunity appropriate only for speculative money, but then again, there aren't too many companies out there selling products that are in high demand with a target market of about one billion people.

There's another business that I recently came across that looks just as interesting as AOB. This company is called New Oriental Education & Technology Group Inc. (NYSE/EDU, $24).

EDU is in the business of selling education in China. This pure play Chinese company sells a range of educational services, targeting youngsters and adults with full primary and middle school education, as well as English language training and a variety of other courses for adults. The company publishes all kinds of educational material, provides online courses of study, and operates private schools throughout the country.

Founded in 1993, this company now boasts over three million student enrollments. Over 800,000 new student enrollments occurred in 2005. Currently, the company operates a network of 25 schools, 110 learning centers, 13 New Oriental bookstores, employing some 1,700 teachers in 24 cities. The company's online network currently boasts another two million registered users.

According to the company, for the first fiscal quarter of 2007 ended August 31, 2006, it generated revenues of $54.0 million, representing growth of 31% over the comparable quarter of the previous year. Total student enrollments in language training and test preparation courses increased by 26% year-over-year to approximately 337,400.

Net income for the quarter was impressive coming in at $20.8 million, or $0.18 per diluted share. This was about double the net income generated in the comparable quarter last year.

I'm really taking an interest in China stocks that are listed on U.S. stock exchanges. Investment risk is high, but then again, so is the potential return. They are going to be volatile, but both AOB and EDU look like great investment opportunities.