I think I look at it differently than most people. I don't consider it investing in China, I consider it investing in a company headquartered in China, (presumably with many, but not all, Chinese shareholders).
Now, this gets some what murky since the Chinese gov't owns some or all of many Chinese companies, and receives taxes from those which it doesn't own. The same is also true for the USA, of course. China is going through the same stage of growth that the US did in the last part of the 19th century, with many of the same kinds of complaints being raised today as were directed at the US back then.
I look at trade the same way. I am not trading with China, I am trading with Mr. Li, or whoever. I suspect that I have a lot more in common with the man on the street in China than I do with a member of the US congress.
I have invested successfully in both China and Russia, which I admit made me feel a bit strange, considering my Cold War upbringing.
Now, I have no problems with investing in China, but I am not currently invested there. (With the exception of mutual funds, it would be a full time job tracking where in the world they invest).
I am considering shorting a Chinese fund.
If you are not comfortable investing in China, I would recommend that you ignore the Chinese market, and concentrate on areas where you are comfortable. This may sting a bit if you find you have passed up a winning investment, but that is the way the cookie crumbles.