If you saw the Olympics, then you glimpsed China's potential. At least, former British Prime Minister Tony Blair did. In a recent Wall Street Journal editorial, Blair wrote that he observed "a confidence, an optimism, a lack of the cynical, and a presence of the spirit of get up and go, that reminded me greatly of the U.S. at its best and any country on its way forward."

Even NBA star Dwyane Wade was an admirer, calling the National Stadium (a.k.a. the Bird's Nest) "the best building I've ever seen."

It's important to remember
Keep in mind, however, that the Olympics were held in Beijing. Few other cities in China are home to so many architectural marvels, such a developed economy, and access to such a variety of imported goods -- and that means great growth opportunities.

When our Motley Fool Global Gains team traveled to China in June, we discovered that in a factory town in the west of China -- just an hour outside of Xi'an -- you still can't get a can of Coke. That's despite Coca-Cola (NYSE: KO) being a major Olympic sponsor, hiring Yao Ming to be its spokesman, and spending a hefty sum to distribute product in China.

Then you have the revelations wrought by disaster. Many schools that collapsed during the earthquake earlier this year were not constructed to code with sound materials. A recent fire at a chemical plant in Gunagxi burned for more than seven hours -- killing 20 people and injuring 60 -- likely because the plant had no fire safety equipment.

In other words, there are significant opportunities for both a multinational like Honeywell (NYSE: HON) and a smaller domestic player such as China Fire & Security (Nasdaq: CFSG) to bring factories, plants, and other facilities up to code. Similarly, concrete industry players such as Cemex (NYSE: CX) and KHD Kumboldt Wedag have a significant opportunity as China looks to upgrade the quality of its construction.

These companies and many others stand to make good money as regional cities grow to resemble Beijing more and more.

Not everybody thinks that way
China, however, has its detractors. There are political opponents who legitimately criticize a repressive regime for its stances on free speech, religion, Darfur, and Tibet. Then there are business skeptics who legitimately fear that internal controls at Chinese companies are lacking, and that related-party transactions between Chinese entrepreneurs are too prevalent. Finally, there are folks who just don't want to get involved. I spoke to a hedge fund manager the other day who won't even consider China ideas, because he'll only invest in companies he "can knock the doors down on personally."

None of these groups are willing to invest in China, but I remain a believer.

The question is: Are you?
If not, you should be. China has its problems -- there's no getting around that.

As Prime Minister Blair wrote, "No sensible Chinese person -- including the country's leadership -- doubts there remain issues of human rights and political and religious freedom to be resolved." But like Prime Minster Blair, I believe that we -- as both investors and world citizens -- should not judge China on how far it has to go to meet our "Western standards," but rather how far it has come, and how much potential it has to be an economic and political friend and ally of the United States. Continued...