There has been a rise in discussions on the concept of reverse mergers in the media relating to companies in China listing on domestic exchanges. The speculation is that some of the small Chinese stocks debuting on the domestic exchanges, which resulted from reverse mergers, are being investigated for pump and dump schemes, along with questionable reporting. Yes, there will be frauds and misinformation, but my investment advice is to remain patient and not simply go out and dump Chinese stocks. This is my best stock advice to you.

China is on the right path towards developing into a rising world economic power as well as a basin for incredible and sustained growth across many sectors, including industrial, mining, energy, services, and technology. The reality is that, if it is saleable and in demand, then you know that China will likely have the consumer market for it. China knows that and so do many of the other global multinational companies, including many in the United States.

The country is cash-rich. At the end of 2010, China held about $1.16 trillion of U.S. Treasuries, based on information from the U.S. Treasury. The amount held is significant given that the Federal Reserve holds just a bit more at $1.2 trillion.

China had about 1.341 billion people at the end of 2010, according to the National Bureau of Statistics. Think about the sheer size of the country’s middle class, which is mind-boggling and clearly reflects the amazing potential in China. The World Bank estimates that, within five years, there will be 542 million middle-class consumers in China. Yet, that may be conservative, as I have seen top-line estimates at around 700 million.

The groundwork has been laid. The workers are marching in from the farm. And the end goal is to build a world superpower in economics and political influence.

For 2011, China’s Gross Domestic Product (GDP) is estimated to grow by over 10%, according to the Organization for Economic Co-operation and Development (OECD). In fact, economic growth in the Asia Pacific region is promising, including seven-percent projected growth in the developing Asian economies and a stellar 8.3% in China’s neighbor, India. China is working hard on increasing its trade and alliance with India.

And people are spending. Domestic sales in China are predicted to reach $2.1 trillion in 2010, versus $1.8 trillion in 2009, according to the Chinese Academy of Social Sciences.

The current per-capita income in China is just below $4,000 a year, yet it has more than doubled over the past few years and wages are heading higher. With this comes more spending. Consider this: at the present time, only a small fraction of China’s GDP is driven by consumer spending, compared to about 70% in the U.S. China wants to drive consumer spending long-term and this will drive organic domestic GDP growth.

“If you build it, they will come” appears to be the motto in China these days. Just take a look at Beijing and Shanghai and you will notice the commercialism that has sprung up in that country. It was only a few decades ago that China was still closed to outside firms and domestic entrepreneurship. This has changed and the associated growth has been stellar.

Wait another 10 years and I’m sure the country will continue to grow into a much bigger mega-market for goods and services.