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Back in May, I posted a piece on the Top 10 China plays. I am happy to report that, within 2 months, that portfolio of 10 stocks is up almost 14%. However, now I believe it's time for some changes. You can see the entire portfolio by clicking here.

Since the post, the (NYSEARCA:FXI) - the default China 25 index- is up 21% primarily due to the high exposure of the index to the Chinese financial sector. Sadly, none of the big banks in China are tradable on the NYSE (China Merchant Bank and China Construction Bank are two such names). The 21% gains comes on the heels of a 20% gain from December of 2006 to May 2007.

Needless to say, the Chinese market is still going gangbusters, but there are some revisions to the portfolio that I believe will boost performance. One thing that I would like to mention is that it would be very easy to recommend all energy stocks such as PetroChina Co. Ltd. (NYSE:PTR), China Petroleum & Chemical Corp. (NYSE:SNP), and CNOOC Ltd. (NYSE:CEO) or all telecom stocks China Unicom Ltd. (NYSE:CHU), China Netcom Group Corp. (NYSEARCA:CN), and China Telecom Corp. Ltd. (NYSE:CHA), but the purpose of this list is to remain diversified (within China of course - which makes this an oxymoron but whatever). Furthermore, the Chinese market has advanced significantly, and is due for a correction, so when buying, please proceed with caution.

First, let's evaluate the companies I would like to remove from the list.

51Job, Inc. (NASDAQ:JOBS) - JOBS has been an underperformer of the Chinese stock market for a while. Since falling from grace back in Jan 2005 when the stock was over $50, it has failed to regain favor on Wall Street.

LJ International (NASDAQ:JADE) - JADE is a stock I still like, but its delinquent filing has caused the stock to drop 25% in 2 days. While I think the stock will recover, there is no telling how long it will take. Besides, investors are already jittery about Chinese stocks - the last thing they need is a stock that is late in its regulatory filings.

Now lets look at what I would add to this list.

China Southern Airlines (NYSE:ZNH)
- ZNH is China's the biggest carrier by fleet size. Last week, the company announced plans to buy 20 A320 jets from Airbus and 25 B737-800 planes from Boeing (NYSE:BA). With the 2008 Olympics a javelin throw away (sorry I couldn't help it), travel to China is far from where it will be next year and the following years. Granted that fuel prices are historically high, however it is that time of the year when the airline sector should begin to rally.

New Oriental Education (NYSE:EDU) - EDU is China's largest English-language and test-preparation provider by revenue, which operates 128 schools in 34 cities. The company plans to add another 24 to 31 such schools by this time next year. According to the Wall Street Journal, New Oriental is the market leader with about 5% of China's language-teaching business, analysts say, putting it ahead of competitors in a highly fragmented sector with some 50,000 companies. China's English-language teaching sector may have revenue of $3.9 billion by 2010, analysts estimate. The stock is up 150% in the last year but has dipped 10% below its high of $60. At any dip, I recommend buying.