It’s tough to say no to a combination of the world’s fastest growing economy and a rampaging stock market. But that’s precisely what money manager Leonard Mohr is saying to China, whose gross domestic product growth is barreling along at a sizzling 10%-plus, and whose stock market, as measured by the Shanghai Composite Index, is up 56% this year following a 130% surge in 2006.

“It’s tempting as hell, but I’m out of China,” Mr. Mohr, a principal of Los Angeles-based MCR Associates, told me. “The Chinese market is not just an accident waiting to happen, but a giant accident waiting to happen,” he said. “A tsunami is on the way — not if, but when. It’s almost as certain as death and taxes.

“Given the enormous speculation,” he added, “it wouldn’t shock me to see this market drop 20% or so in a matter of days in response to some bad news.”

Sharing his view is no less a figure than a former Federal Reserve Board chief, Alan Greenspan, who recently generated global headlines with his admonition that “the rally in Chinese stocks is ‘clearly unsustainable'” and that “there’s going to be a dramatic correction at some point.”

What “at some point” means, of course, is open to serious question. Is it in days, weeks, months, or, maybe, years? There’s no doubt the Fed skipper will be right, as no market ever goes straight up without running afoul of a significant decline. It should be pointed out, though, that his highly publicized 1996 pronouncement about “irrational exuberance” in the American markets was made three years before the peak.

Still, there are those on Wall Street who share Mr. Greenspan’s view. One is Wachovia’s chief investment strategist, Rod Smyth. Taking note that the Chinese market’s surge is coupled with an abundance of high price/earnings ratios (50 or more), and a rush by millions of Chinese citizens to open brokerage accounts, he sees an “investment mania” developing.

Significantly, he compares the Chinese mania to the Nasdaq bubble of the late 1990s, when, at its peak, the Nasdaq’s price/earnings soared well above 100. Sanity, though, eventually set in and Nasdaq got crushed. Still, Mr. Smyth notes new pools of speculative money could enter the market to keep the momentum going.

So far, the Chinese market has twice gotten whacked this year, tumbling 9% on February 27 over investor worries about excessive valuations (which also sent the Dow tumbling 416 points), and another 6% early this month in reaction to the Chinese government’s increase in the transaction tax on stock trading.

Despite the obvious risks, some investors insist on owning some Chinese stocks. One is Symphonie Burrell, who recently e-mailed me: “My broker tells me I’m crazy not to own any Chinese stocks. Since he is not familiar with this market, could you ask one of your Asia experts for his three favorite names and his target prices? No penny stocks please.”

I put that question to a China bull, Tony Sagami, editor of the Asian Stock Alert newsletter of Bigfoot, Mont., who recently returned from a three-week Asian trip. His three best buys and price targets are as follows:

• New Oriental Education (edu), China’s largest provider of educational services, which includes teaching citizens how to speak English, a $72 billion annual market overall. Mr. Sagami rates the stock a 10-bagger and sees it at $500 over the next decade.

• Cnooc (ceo), China’s largest offshore oil and natural gas company. Mr. Sagami reckons that if oil gets to $80 a barrel — which he considers inevitable because of China’s ravenous appetite for it — Cnooc’s shares will double in two years.

• China Mobile (cnl), the world’s largest mobile phone company, which is enjoying surging sales in China. “I think it’s a $100 stock by the 2008 Olympics,” Mr. Sagami says.

What about the risk?

“There’s bigger risk in the slowgrowth American economy than there is in the hyper-growth Chinese economy,” Mr. Sagami observes. Noting that the World Bank is projecting Chinese GDP growth of 10.4% this year, more than four times the roughly 2.2%–2.5% growth some economists are forecasting for the American economy, Mr. Sagami believes that China should represent at least 10% of every stock portfolio. Chinese stocks, he argues, are no riskier than many leading American technology stocks.

Celebrity global money manager Jim Rogers shares Mr. Sagami’s rosy view of China, to the point where the New York resident, 64, is planning to move to a Chinesespeaking country if he can sell his Riverside Drive home, which he recently put on the market for $15 million. He bought the house in 1977 for $107,000.

Why move to China? “Because it’s the wave of the future,” the former sidekick of George Soros says. “Moving to China is like moving to New York in 1907 or like moving to London in 1807.”

In addition, he notes, his 4-year-old daughter, Hilton, speaks Chinese.

dandordan@aol.com