Money: Bullish on China?

Investments abound, but beware the hype

Right now, investing in China is hotter than a pot of green tea. Sure, Morgan Stanley Capital International's China stock index suffered a 9% setback in mid-April, but it has still gone up 72% over the past 12 months. In January and February alone, some $320 million poured into U.S.-based mutual funds invested in China. The bullish case for China seems irresistible: a stable government, millions of aggressive entrepreneurs, plenty of cheap labor and 1.2 billion consumers eager to fulfill a lifetime of pent-up demand. But don't be blinded by hype. Here are the important questions:


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