China is a rapidly expanding economy that has weathered the current economic recession reasonably well. Options for investing in China stock picks are numerous but as a foreigner the markets and the culture are likely to be completely unknown. So where to start to find stocks to invest in?

It is difficult to start operations in China or even to buy out existing Chinese operations as a foreigner. Instead in most instances a joint venture with a local company needs to be entered into. These deals help get around cultural traps but are not risk free as a number of foreign firms have found. Last year a number of large milk companies with ties to local milk joint venture lost millions when a chemical scandal hit.

Purchasing stocks in Chinese companies is another option. However it pays to be aware that there are a number of government regulations about what types of company stocks foreigners can buy. Many companies have tier A and Tier B shares with only one tier being available to foreigners, the other for the locals.

Private Equity funding is also proving popular but there are often problems with these investors struggling to get good information out of their Chinese counterparts. In some instances firms have avoided China for this reason.

Property Investments are another growth area. In the two big cities of Beijing and Shanghai there are less opportunities as the market is crowded with players. However outside the main centers there is much growth able to be capitalized on.

Investing in China stocks, is investing in an emerging economy. Like any foreign foray you need to understand how the markets operate and what opportunities really mean. In these circumstances good advice and good research are critical components of success.