In addition, stock prices of the big Chinese banks are relatively cheap: Bank of China trades at 1.4 times forward book value, and Agricultural Bank of China trades at 1.6 book value for fiscal year 2011, even though Bank of China is considered a better-run bank.

FORBES: CLSA: Chinese Banks Are A Buy

"The truly rich can afford to live anywhere, and the poor get double-digit wage increases every year, " Mr. Rein, author of the book "End of Cheap China, " said.

WSJ: An Unhappy Middle in the Middle Kingdom