Although infrastructure was the primary focus of China’s recent stimulus efforts, that bump in spending represents a drop in the bucket over the long haul. The continued migration from rural to urban areas will necessitate massive infrastructure spending over the next two decades.

Over the past 22 years, millions of rural Chinese have streamed into the country’s burgeoning cities in search of work and greater opportunity. At the end of 2008, just over 46 percent of China’s population resided in urban areas. By comparison, the UK took 120 years to achieve that level of urbanization, the US took 80 years and Japan took 30 years.

Add in a population that continues to grow despite the nation’s birth control policies, and you have an unprecedented need for infrastructure investment. Analysts predict that infrastructure spending in the country could reach USD35 trillion over the next 20 years. That’s on top of the staggering USD586 billion spending plan that China enacted last year to counteract the global financial crisis.

The table “Infrastructure Outlays” highlights the sectors that already have benefited from this massive build-out. Unfortunately, the securities of many of the key companies involved in those projects are difficult, if not impossible, for US investors to purchase.

INDXX China Infrastructure Index (NYSE: CHXX), recently launched by Emerging Global Shares, allows investors to harness these trends through a single exchange-traded fund (ETF). With access to local exchanges, the fund tracks a diversified basket of Chinese infrastructure outfits (see “Sector Allocation”).

Real estate management and development names account for 22.7 percent of the portfolio, and the sector that should prove quite profitable over the long term.

More immediately, the central bank’s moves to clamp down on lending should cool real estate prices. Although higher lending rates have made it easier for homebuyers to securing financing, affordability measures indicate that homeownership is well within reach of most households. That should provide broad support for real estate prices even if price growth slows in hot markets.

Railroad stocks also figure prominently in the ETF’s portfolio, with a position in China Railway Group (Hong Kong: 0390) accounting for 4.7 percent of investable assets.

Given the huge distances involved in moving goods, the bulk of China’s freight travels by railroad. And unlike in the US, passenger rail is a major mode of transportation.

China Railway primarily works on the construction side of the business. In that capacity, the company is involved in several major projects, including a $17.6 billion passenger line being constructed across China’s arid northwest, a $24 billion high-speed line that will run from Beijing to Guangzhou in the southeast, and a $22 freight network in Shanxi province.

The ETF is a bit light on names related to airports and seaports as well as roads than one might expect. That being said, it’s an excellent way to play China’s ongoing infrastructure build-out.

Prospective investors should check the fund’s net asset value and use limit orders to purchase shares; trading volume hasn’t picked up yet for this newly launched fund.