One of the most attractive geographic areas to invest recently has been China. As one of the BRIC (Brazil, Russia, India and China), this country has been seen as one of the saviors for the global economy.
While China certainly presents its share of risks, there are plenty of opportunities seen in this area as well. Most notably, China has been industrializing at a pace that has many of the world's other countries shaking their heads and wondering how they can somehow capitalize on the growing country's needs. One area that has seen a lot of demand from China has been the natural resources field. With many resources having limited supply, China's hunger for those resources has helped resource companies remain profitable, even during the bleak recession period from 2007 through to 2010.
As well, China's growing wealth has allowed many of its citizens to enjoy an ongoing improvement to their standard of life. This means two things. First, with growing domestic wealth in China, there will be greater demand for discretionary goods from abroad (a growing middle class means a growing desire for higher-quality, higher-end material possessions, many of which are indeed discretionary).
The second area that should continue to perform well for the growing middle class is the fact that China pegs its Yuan so that it remains financially advantageous for countries like the US to continue importing China's manufactured goods. This means domestically, the growing middle class can continue to enjoy low unemployment, good wages and strong demand for their labor (in fact, the US continued to announce trade deficits, which are becoming a concern).
The many different benefits and perceived opportunities in China has led a lot of different companies to invest heavily in this region, including Warren Buffett and many highly capitalized professional investment firms. While some of these investors are indeed aiming to service their own needs through lower manufacturing costs and the opportunity for tremendous gains, the fact that so much wealth has been flowing into China from outside investors should be reassuring.
However as mentioned earlier, investing in China also comes with its share of risks. This means that investors who are serious about taking a position in this country -- normally through a specialty fund, either a mutual fund or exchange graded fund -- should see the expertise of an adviser who understands this unique economy. As well, it is normally recommended that investors limit their exposure to a small percentage of their overall portfolio and continue to stick to their core holdings.