Are those happy days back? The China SPDR ETF (GXC) outperformed the S&P 500 by 26% in the past three months. Last week we told you about international real estate – China is one of the big drivers in that play. This week, we have another idea in the Middle Kingdom.

With the world’s largest population as its market, the mobile phone industry in China is set to soar. This makes China Unicom (CHU) such a compelling play. Jim Cramer touted the stock this week after China Unicom’s vice president said the company is targeting subscriber growth of 20 million to 30 million within a year. To put that into context, Verizon Wireless, the largest mobile phone carrier in the U.S., had 72.1 million subscribers at the end of last year.

China Unicom has 21% market share in China. It recently announced it may partner with Apple (AAPL) to offer the iPhone, which has so far been unavailable in China. Given the sleek smartphone’s huge popularity in the rest of the world, it is reasonable to expect Chinese consumers will flock to the iPhone in droves. China Unicom uses 3G WCDMA technology, the latest and greatest mobile voice and data network for both the iPhone and other platforms.

Of course, this news hasn’t flown under the radar of Wall Street. UBS upgraded China Unicom to “buy” last week. The stock surged through critical resistance around $12 and appears to be in breakout mode. The shares now go for $14.97, comfortably above both the 50 and 200-day moving averages. Chinese stocks have a penchant for rallying hard and fast when a catalyst motivates fresh buying.

Perhaps a pullback into the mid $14 area will give long-term investors a chance to get in. China Unicom should be treated as a long-term play on China’s flourishing economic prominence. China’s wireless market had just 52 million subscribers in 2000. That figure now approaches 500 million and wireless penetration is expected to reach 71% in 2012. That would be 71% of over 1.3 billion people, China’s current population.

With such massive growth prospects, China Unicom has the potential to be very rewarding indeed. It could be one of the best ways to play China’s astounding economic growth. We expect this stock to outperform the broader market both in the near-term and over the long haul. To play China’s telecom potential, go with CHU.