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.

Related Articles
  1. Stock Analysis

    How Toyota Succeeds at Home and Abroad (TM)

    Japan's biggest car manufacturer is also one of North America's biggest, delighting shareholders with its high profit margins.
  2. Stock Analysis

    Starbucks: Profiting One Cup at a Time (SBUX)

    Starbucks is everywhere. But is it a worthwhile business? Ask the shareholders who've made it one of the world's most successful companies.
  3. Stock Analysis

    How Medtronic Makes Money (MDT)

    Here's the story of an American medical device firm that covers almost every segment in medicine and recently moved to Ireland to pay less in taxes.
  4. Investing News

    Latest Labor Numbers: Good News for the Market?

    Some economic numbers are indicating that the labor market is outperforming the stock market. Should investors be bullish?
  5. Investing News

    Stocks with Big Dividend Yields: 'It's a Trap!'

    Should you seek high yielding-dividend stocks in the current investment environment?
  6. Investing News

    Should You Be Betting with Buffett Right Now?

    Following Warren Buffett's stock picks has historically been a good strategy. Is considering his biggest holdings in 2016 a good idea?
  7. Products and Investments

    Cash vs. Stocks: How to Decide Which is Best

    Is it better to keep your money in cash or is a down market a good time to buy stocks at a lower cost?
  8. Investing News

    Who Does Cheap Oil Benefit? See This Stock (DG)

    Cheap oil won't benefit most companies, but this retailer might buck that trend.
  9. Investing

    How to Ballast a Portfolio with Bonds

    If January and early February performance is any guide, there’s a new normal in financial markets today: Heightened volatility.
  10. Stock Analysis

    Performance Review: Emerging Markets Equities in 2015

    Find out why emerging markets struggled in 2015 and why a half-decade long trend of poor returns is proving optimistic growth investors wrong.
RELATED FAQS
  1. How do mutual funds work in India?

    Mutual funds in India work in much the same way as mutual funds in the United States. Like their American counterparts, Indian ... Read Full Answer >>
  2. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  3. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  4. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  5. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  6. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center