China continues to make great strides toward becoming the No.1 economy in the world. In fact, in only a few decades China has progressed from an anit-market Communist state to become the world's second largest economy. The combination of China's appetite for natural resources and Western countries' foreign direct investment in China have put Chinese stocks on investors' radar as the next biggest growth story. (For background reading, see Top 6 Factors That Drive Investment In China.)

In Pictures: 5 Reasons Why Companies Care About Their Stock Prices

Many Chinese public companies are firms that were once owned by the communist government, such as China Life Insurance Company (NYSE:LFC). Parts of these companies were then spun out to public shareholders to raise funds for expansion. (For more insight, see State-Run Economies: From Public To Private.)

In many cases, only a minority stake has been spun out, while the government continues to control the overall operations of the company, leaving shareholders with little say. Also, there is no guarantee that the interests of the government will be aligned with those of shareholders. (To learn about U.S. shareholder rights, see Knowing Your Rights As A Shareholder.) Therefore, there is some additional risk involved.

For those with some risk tolerance, there are many Chinese companies that are also listed on the U.S. exchanges. Here are the five best-performing Chinese companies.

Company Market Cap YTD % Gain
Baidu (Nasdaq:BIDU) 38.19B +166.90%
51job (Nasdaq:JOBS) 1.29B +161.75%
hiSoft Technology International (Nasdaq:HSFT) 768.62M +157.69%
ReneSola (NYSE:SOL) 1.06B +157.35%
Spreadtrum Communication (Nasdaq:SPRD) 651.77M +152.75%
JinkoSolar Holding Co. (NYSE:JKS) 2.36B +146.32%

Bottom Line
China has achieved amazing growth over the last three decades. And, considering the scale of its current building efforts, it appears poised to become a full-fledged superpower, giving Chinese stocks major potential as investments.

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