By Tim Seymour
... This is despite people being more negative on the Chinese market (FXI) than they were at the bottom of the 2008 crisis.
Look for growth in Beijing to continue, particularly in air particulate matter.
Let's go through them. Exports to China from Taiwan (EWT) and Korea (EWY) are up for the first time after ten month and six month moves lower. Premium auto sales were stronger last month, tractor sales data was better, Yum Brands (YUM) has announced better sales there, and the state agencies are in buying banks shares over the last couple days.
In addition, China is easing foreign restrictions on investment rules. Ultimately this is another way to support its sagging market. I said two weeks ago that the Chinese market was a technical buy. This call has been supported and we would argue continues to trade higher.
Note also the move higher in iron ore and coal prices. This is where you will see the greatest benefit of the "China trade." It's not even about Chinese-listed or Hong Kong-listed ADRs. It's about the lateral thinking on resources and even beaten-up cyclicals.
The Chinese market remains key to a broader emerging markets rally, and we like what we see. The news flow in the last few weeks has been quietly improving, if not downright interesting from a markets perspective. Just don't expect a sledge hammer in the head showing you the way.