There was a time when the buzz around Wall Street was the creation of new ETFs that allowed U.S. investors to easily participate in the booming emerging markets.  Well, in an sign of just how far the tables have turned, the buzz now on Wall Street is all about a new China-based ETF that allows Chinese investors to buy the S&P 500.

Last week, China-based money management firm Bosera Asset Management announced that they had obtained rights from Standard & Poor’s, a unit of McGraw-Hill Cos. (MHP), to launch an S&P 500 ETF specifically designed for Chinese investors.  This move is a big deal for Chinese investors, as their access to foreign markets has largely been limited by Chinese law.   

The Bosera deal with Standard & Poor’s gives one of the fastest-growing capital markets access to the S&P 500, which already is the world’s most widely used index. The U.S. version of the ETF, the SPDR S&P 500 ETF (SPY) had over $70 billion in assets at the end of February, according to data from the National Stock Exchange.

Although a release date hasn’t been established for the new China-based S&P 500 ETF, you can bet that Chinese investors will want to add the world’s most ubiquitous index to their international investment mix. Just as investors in America see emerging markets as a great way to spice up their portfolios and add diversification, Asia is still very much in love with U.S. stocks and businesses.

I think there are two key takeaways from this deal.  First, the move is a good one for Standard & Poor’s and its efforts to expand operations into new, cash-rich markets such as China.  That will ensure money continues to flow into the index and its constituent stocks. More importantly, however, is that this deal shows just how powerful a force China has become on the global capital stage. Instead of investing in China, Americans are really looking for China to invest in them.

For some years now, savvy investors around the globe have been aware that China is the place to take advantage of big-time economic growth — and big time wealth creation. That wealth creation has not only been felt by investors outside China, but also by investors within China’s borders.  This real evidence of a new Chinese investor class — one with enough juice to buy S&P 500 Index ETFs — shows that the wealth creation of China’s economic  makeup is stronger and more vibrant than ever.

This news is another key bit of information confirming that China is the place to be for U.S. investors looking to achieve growth.  You see, when the people now have enough capital to invest in the biggest index in the world, you know that nation’s economy has arrived.

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