By David Sterman

NEW YORK ( TheStreet) -- Shares of Chinese companies have risen and fallen in cycles during the past few years. But China's economy has been going only one way -- up.

Still, because of the law of large numbers, China's future economic growth is unlikely to be as impressive. But thanks to heavy investments in infrastructure, China is now well-equipped to handle a sustained period of solid economic growth -- perhaps in the 4% to 5% range. That's a rate we in the U.S. can only envy.

The key, then, is to look for Chinese companies that stand to do well over time -- that means companies focused on China's emerging middle class. As the ranks of the Chinese middle class swell, look for growing spending on health care, retail goods and tourism, along with advances in agricultural yields and energy efficiency.

Increased Travel and Tourism: With rising disposable income comes the urge to travel, and the Chinese are increasingly venturing out, either elsewhere in the country or throughout Asia. And they're increasingly using the Internet to research and book flights and hotels. But this is not yet a mature business. Less than 30% of the Chinese population is online, compared with more than 70% in countries such as Korea, Japan and Singapore, according to global communications firm Fleishmann-Hillard.

How large is the potential travel market? During the late-September, early-October holidays, 200 million Chinese are expected to hit the road (mostly to go back to their home region). That's two-thirds the population of the U.S. And according to analysts at Brean Murray, 10% of Chinese travelers now use the Internet to arrange travel plans -- roughly 20 million people. That figure is expected to rise to 60 million in 10 years.

Ctrip.com ( CTRP) is seen as the best pure play in the online booking industry and has considerable brand recognition in this fast-growing area. Web portal Taobao.com has vowed to overtake Ctrip.com eventually, but there's ample room for both of these firms to flourish.

The Ad Market Builds: Chinese consumers are bombarded with advertising pitches at every turn. But companies are realizing that the scatter-shot approach isn't helping to truly establish brands in consumers' minds, so they are turning to agencies that have more targeted ad campaigns tied in across several types of media. Sina.com ( SINA) has emerged as a leader. The company's range of tools, both online and offline, are considered to be innovative, which has enabled Sina.com to quickly build a large base of Chinese and foreign clients that are looking to get a foothold in China.

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