China’s transformation from closed-door communist society to quasi-capitalist global powerhouse has created a huge investment opportunity. But many outsiders are reluctant to put their capital in a nation that is vexingly difficult to understand.

On one hand, investors are drooling over the opportunities that China’s dynamic economic growth represents—reflected by double-digit increases in industrial production and retail sales year over year in several months of 2010. On the other, investors are wary of investing in companies that don’t report financial results, take orders from the government or may soon be subject to a floating currency.

In a nutshell, the Chinese economic landscape is riddled with minefields. (more…)