Emerging market volatility has swayed investors to look elsewhere for returns, however, valuations are looking cheap for focused exchange traded funds. Investment in the iShares FTSE China 25 Index (NYSEArca: FXI) is a low-cost, effective way to gain exposure to the second largest economy in the world.

Over the past three years, GDP growth in China has posted around 10%, reports Augusto Fontevecchia for Forbes. After the U.S. unveiled that there will be another round of quantitative easing, analysts are certain China will announce a stimulus to compete. After all, central bankers around the world have been doing everything they can to support or ignite growth. [Comparing Two ETFs for China]

“Stimulus, they suggest, is warranted. And indeed it has been announced. In order to stabilize GDP growth, the NDRC (Beijing’s planning agency) have approved a slew of highway and subway projects, along with power stations, wind farms, airports and other things, worth an estimated $158 billion, or 2.1% GDP growth,” Fontevecchia wrote. [Domestic Consumption Slowdown Hits China]

SPDR S&P China ETF (NYSEArca: GXC) and Powershares Golden Dragon Halter USX China Portfolio ETF (NYSEArca: PGJ) are among the other ETFs indexed to China. WisdomTree China Dividend ex-Financials Fund (NasdaqGM: CHXF) is another interesting option that recently launched.

Barclays analysts warn that investors should not expect a huge spark in growth output in China. Reasons are because GDP growth is still over 7.5%, the jobs market is stable and inflationary pressure is looming. Inflation may be a more important issue for leaders to address rather than growth.

So far, FXI has lost 3.2% in 2012. Chinese equities are struggling with major companies in the red. For the near future, China’s leadership plans on reducing exposure to foreign demand, while increasing domestic consumption. [Best Emerging Market ETFs]

China is a member of the so-called BRIC countries along with Brazil, Russia and India. [BRICs VS. Emerging Market ETFs]