Facing a saturated market at home, Anheuser-Busch (NYSE:BUD) is seeking to tap into more than a billion additional customers in China with its new investment in Chinese brewer Harbin Brewery Group.

The maker of the "King of Beers" paid $139 million for a 29% stake in Harbin, which is China's fourth-largest brewer with roughly a 4.3% market share. Harbin reportedly posted a net profit last year of $14.7 million.

Anheuser-Busch is no stranger to China, as it already controls a 9.9% stake in China's biggest beer company, Tsingtao, and plans to increase that position to 27% over the next several years. But as a smaller player, Harbin may represent a more promising growth opportunity than Tsingtao. For example, Harbin's business is currently concentrated in the northeastern part of China, while Tsingtao already distributes its beer nationwide.

As for beer drinking trends in China, all signs look good. A Dec. 2003 Washington Times article indicates that China ranks second to the U.S. in total beer consumption, and that the Asian giant is rapidly closing the difference. Some analysts estimate China's beer drinking market to grow 5% to 6% annually for the next several years. Make way for the Chinese beer belly.

In the U.S., Anheuser-Busch is locked in intense competition with Coors (NYSE:RKY) and SABMiller, which is partly owned by Altria Group (NYSE:MO). Admittedly, in its most recent quarter, Anheuser-Busch showed an impressive profit gain due in part to successful price hikes. But customers' loyalties may only go so far. Even if a Bud is "beechwood aged" with a recent "born on" date, its drinkers probably would have trouble coughing up microbrew prices, on principle alone.

With this kind of environment, making an end run around the competition by investing in China is a no-brainer. As Seth Jayson has pointed out, though, Anheuser-Busch's balance sheet, particularly its debt level, bears close watching.

Is Bud smart to be moving further into China? Share your opinion with other Fools on the Anheuser-Busch discussion board.

Fool contributor Brian Gorman doesn't own shares of any of the mentioned companies.