From BusinessWeek (link)
Many retail investors outside of China wonder how they can get exposure to the booming mainland economy. They hear stories of venture capital funds making fortunes by investing in companies like Sohu.com (SOHU ), China’s biggest Web portal, and want to get a piece of the action. Unfortunately for the small investor, there are not many well-run Chinese firms traded on the NASDAQ and other foreign exchanges.
Aside from Chinese online travel service Ctrip.com (CTRP) and a few others, I have not seen too many firms in China where an individual can invest, and be comfortable because he understands what he’s buying. Investing in Chinese companies that are available to foreign investors can be a treacherous affair. Financial reporting problems often dog major mainland companies. Not only that, far too many Wall Street analysts who peddle investment advice on cable news programs and personal finance magazines in the U.S. have little idea of what’s really going on in China.
