How to make money out of the China boom

China has many features that make it an attractive investment destination - and certainly the level of foreign direct investment that China receives highlights this.

It is the world's most populous nation with 1.36 billion people as of 2010, and growing by more than 7.6 million people each year. It is now the world's second-largest economy, and one of the planet's fastest-growing economies.

It is also one of the riskier investments, as each move by the Chinese government to rein in inflation and growth to maintainable levels often has a large impact on company profits and therefore can be harmful to the share prices of those affected.

The best way to take advantage of the boom while minimising the risks is to invest through a managed fund that has analysts on the ground who can determine which companies will thrive and which face continuing challenges.

Opportunities exist to make money out of the China boom outside Chinese companies - although one does not typically get "pure" exposure via these means.

For example, China is the world's largest producer of steel, and you can invest in companies that supply iron ore and other commodities, such as Australian iron ore producers and high-technology machinery manufacturers in Korea and Japan.

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