Who's Winning the Global Competition Race

If you want to know who is going to win the international investment sweepstakes, take a look at the table of 2010 consensus GDP Growth Estimates below. The ranking, prepared by the good folks at the Bespoke Investment Group, is very crowded at the top with countries I have been banging the table about for the last year. The odds on favorite is China (FXI), coming in at a breathtaking 9.4% forecast. The truly amazing thing is that China continues delivering blistering growth, while having the fourth largest GDP in the world ($4.3 trillion), after the EC ($18.4 trillion), the US ($14.4 trillion), and Japan ($4.9 trillion). That’s why it is my lead canary in the coal mine for the global risk appetite, which at the moment is expanding. Next comes Indonesia (IDX), an emerging market oil and LNG exporter, and one of the top performing stock markets last year, boasting a 5.55% forecast. Brazil (EWZ), the country that does everything right and will host the 2016 Olympics (look at the astronomical move China’s market delivered in the eight year run up to their Olympics), could bring in a 4.75% rate. Hong Kong (EWH) comes in at 4.45%, no doubt benefiting from proximity to the Middle Kingdom. South Korea (EWY) is expected to bring in a 3.95% growth rate. The US (SPX) growth forecast is at 2.6%, very close to my own. Skip Spain, which is enduring a subprime induced real estate meltdown that makes ours look like a walk in the park, and suffers the only negative GDP forecast for 2010. It is no revelation that you should be shoveling money into high growth countries, and passing on the also rans, like the US.