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The Chinese government’s recent change in currency policy means investors should consider Chinese consumer and infrastructure stocks, said James McCaughan, CEO of Principal Global Investors.

The People’s Bank of China pledged on June 19 to make the yuan more flexible. In an interview last week at Bloomberg’s Kuala Lumpur bureau, McCaughan said this shift signals the government’s determination to boost domestic consumption.

The decision “is part of a very consistent process the Chinese administration has had of repositioning their growth away from being export-led and towards more of the domestic economy,” McCaughan said. “You would go for the domestic economy, whether it is infrastructure- or consumer-related.”

Des Moines-based Principal Global, a unit of Principal Financial Group Inc., manages $222 billion in assets for institutional investors and retirement plans. “We like the Chinese market long-term,” McCaughan said. “It’s going to be volatile short-term, but long-term we want to be in the Chinese market.”

China ruled out a one-time revaluation of its currency, which has been held at about 6.83 yuan per dollar since mid-2008. An appreciation in the currency will help curb inflation and bolster purchasing power in the world’s fastest-growing major economy, according to reports from China International Capital Corp. and Societe Generale SA.

China’s central bank said it was prepared to resume appreciation because the “upturn in the Chinese economy has become more solid” and that a stronger yuan would help curb gains in consumer prices. That nation’s gross domestic product expanded 11.9 percent in the first quarter compared with the same period in 2009.