Relations between Asian exporters and Western consumers are shifting because of the global recession. According to Taiwan News, share prices closed up 1.66% on Monday to hit the highest level this year, led by large-cap electronic stocks after flat-panel monitor maker Innolux Display announced a major acquisition, dealers said. (See what other Asian economies are recovering).

The market opened up 0.47 % and buying accelerated to boost flat panel makers amid optimism triggered by the acquisition, while interest also spread to select old-economy stocks as they were market laggards. So-called economic “normalization” has been a bright spot in the country over the past 10 months, reports Merritt T. Cooke for Brookings.

As Taiwan’s economy is dependent upon exports, it is easy to see why the market meltdown of 2008-2009 has posted a challenge to the economy’s well-being. A rebound in the technology and information technology sectors may be the ticket for the Taiwanese economy to gain footing. (Why Taiwan’s economy should keep moving in the right direction).

For more stories about Taiwan, visit our Taiwan category.

• iShares MSCI Taiwan Index (NYSEArca: EWT): up 72.9% year-to-date

The International Monetary Fund (IMF) stated that Poland’s “limited reliance on exports, flexible exchange rate and contained external and internal balances” allowed the country to avoid a recession this year, reports Meena Thiruvengadam for The Wall Street Journal. The IMF estimated that Poland’s economy may expand 1.1% this year and 1.9% in 2010.

The Organization for Economic Cooperation and Development (OECD) expects the Polish economy to grow 1.4% this year and 2.5% in 2010, according to Warsaw Business Journal. The economy was aided by a sound banking sector, unleveraged private sector, tax cuts as well as  other fiscal measures and infrastructure investments. But activity will remain below potential and the government deficit will greatly distend, says the OECD.

Van Eck announced its intent to launch a Market Vectors Poland ETF (PLND), which is expected to come out later this month, writes Don Dion for TheStreet. The fund will focus on small- and mid-cap companies, with an index made up of stocks that have a market cap of at least $150 million and daily trading averages of a minimum of $1 million. PLND’s most heavily weighted sectors are reported to have allocations of financials at 40%, energy at 14% and industrials at 11% within the fund’s portfolio.

Country-specific ETFs are useful in diversifying an international portfolio, or tracking short-term trends in international economies that would otherwise not be available to an average investor. However, investors should note that narrowly themed and emerging market ETFs have greater volatility.

While there currently isn’t a Poland single-country ETF, there are a selection of emerging market/frontier market ETFs that do have Poland as a large component. These types of region-specific ETFs also have the added benefit of spreading risk between the economic outcomes of countries included in the ETFs. (How to play Poland’s handsome recovery).

For more information on Poland, visit our Poland category.

• Claymore/BNY Mellon Frontier Markets (NYSEArca: FRN): up 55.7% year-to-date; Poland is 15.1%

• SPDR S&P Emerging Europe (NYSEArca: GUR): up 79.1% year-to-date; Poland is 12.2%

• iShares Emerging Markets Eastern Europe Index Fund (NYSEArca: ESR): up 14.7% since inception; Poland is 12.9%

Max Chen contributed to this article.

Brazil’s policymakers’ fiscal and monetary actions enabled the country to regain its footing in the first half of this year. Leading indicators suggest that the there could be a speedy return to Brazil’s recent growth rates, reports Latin Business Chronicle. (Why this is just the start of the trend).

As the real has picked up its value, other countries and economies are not faring as well. Spain’s economy has lagged most of the other Euro nations, despite the return of investors. That’s despite Banco Santander raising $8 billion – more than three-quarters of which came from international investors – in early October when its local unit made its stock market debut. It was the world’s largest IPO this year. Read more on Spain here.

Brazil’s exports have been strong, thanks to demand from China for soy and iron ore. The improvement is also in part because of improved trade links with Asia and Africa. (Why ties like this are important for future growth.)

With the continued export diversification and active trade policy, along with a large and growing domestic market, the unique structure of Brazil’s economy could keep the country on top. (What else is shifting in Brazil to support economic growth.)

For more stories about Brazil, visit our Brazil category.

• iShares MSCI Brazil Index (NYSEArca: EWZ): up 118.4% year-to-date

• iShares MSCI Spain Index (NYSEArca: EWP): up 39.7% year-to-date

• SPDR S&P China (NYSEArca: GXC): up 64% year-to-date

The U.S. trade deficit grew to a more-than-expected $36.5 billion in September, and 60.5% of the deficit was to China alone, writes Justin Fox for TIME. The U.S.-China economic relationship won’t be resolved anytime soon because of U.S.-based corporations selling products that were partly or entirely made in China. The more important fact, however, is that there is no way to ignore a rising political and military power like China. (Reasons to watch China).

The trade model between China and the United States remains unchanged, with China keeping the yuan artificially low and focusing on its export industries while the United States incurs a higher trade deficit and more debt, remarks Mark Trumbull for The Christian Science Monitor. (Is a strong Chinese yuan a good thing?)

Obama has not shown any pushback against China’s seemingly non-free market policies, despite promises on a tougher stance on China. However, economists are doubtful that any pushback would occur, citing several reasons:

• The tougher approach could result in higher-priced goods for U.S. consumers and the protectionism would rapidly spread to other nations, putting up trade barriers.
• China’s manufacturing power is not slowing one bit.
• An adjusted yuan won’t necessarily help U.S. manufacturers.
• The United States doesn’t have much leverage on China since China is the country’s main lender.

U.S. trade representative Ron Kirk stated that the United States wants trade and investment barriers removed to promote an open global trade system and Obama wants the United States to pursue “pragmatic cooperation” with Beijing, according to BBC News. Obama also urged Asian countries to break away from their dependence on exports and pursue “balanced,” sustainable growth.

For more information on China, visit our China category.

• iShares FTSE/Xinhua China 25 Index (NYSEArca: FXI): up 58.2% year-to-date

• SPDR S&P China (NYSEArca: GXC): up 66.8% year-to-date

• PowerShares Golden Dragon Halter USX China (NYSEArca: PGJ): up 65.9% year-to-date

• Claymore/AlphaShares China Small Cap (NYSEArca: HAO): up 96.5% year-to-date

• Claymore/AlphaShares China All-Cap ETF (NYSEArca: YAO): recently launched

Max Chen contributed to this article.

Norman Chan, monetary authority chief executive in Hong Kong, has suggested that low interest rates and quantitative easing of U.S. monetary policy has allowed people to borrow at low cost and reinvest into Hong Kong’s economy, which is consequently fueling an asset bubble, reports Alex Frangos for The Wall Street Journal. With Hong Kong’s economy in the early stages of recovery, some observers are warning of dangerous bubbles seen forming in property and stock prices. (Hong Kong gearing up for a correction?)

Hong Kong’s currency is pegged to the U.S. dollar and the monetary authority basically has no control over interest rates. Still, if they are able to adjust target interest rates, raising rates will attract more money from foreign investors hunting for higher yields, which would also drive up asset prices.

Other happenings in Hong Kong include:

• Residential property prices in Hong Kong are increasing as buyer interest from mainland China rises, but completion of housing construction remains low. Gonvernment stimulus and low interest rates have provided the necessary money for funding, according to NuWire Investor. Hong Kong’s overall residential price index rose 8.3%, or 8.4% in real terms, in the second quarter of 2009.

• According to the International Monetary Fund (IMF), Hong Kong’s economy is projected to contract 2% in 2009 and expand 5% in 2010. The fall in exports and imports is slowing, as well as the fall in private consumption.

• The unemployment rate in Hong Kong dropped from the previous months to 5.2% for the three months ending in October as construction, food services, insurance and wholesale sectors hired more people, according to China View. (Hong Kong faces its pressures)
  

For more information on Hong Kong, visit our Hong Kong category.

• iShares MSCI Hong Kong Index (NYSEArca: EWH): up 58.4% year-to-date

Max Chen contributed to this article.

Holdings: The largest holdings include Gazprom, 18.1%; Lukoil Oil Company, 9.6%; Rosnett, 5.8%; and Sherbank Rossii, 5.2%.

Objective

The fund tracks the S&P European Emerging BMI Capped Index (STBMEECQ).

What You Should Know

• The top sector allocations in the fund are energy, 45.4%; financials, 22.9%; materials, 11.5% and telecommunications, 8.9%.
• The top countries in the fund are Russia, 65.2%; Turkey, 13.4%; Poland, 11.5%; Hungary, 5.3%; and the Czech Republic, 4.1%.
• The expense ratio is 0.59%.

The Latest News

• According to the World Bank, the post-crisis environment in Russia provided the necessary catalyst for reforms when it comes to the country’s structural constraints and weak domestic demand, writes Gleb Bryanski for Reuters. Without reforms, the World Bank believes Russia’s growth will remain sluggish. (Ways to play Russia’s recovery).
• The Turkish economy was constrained by exports and investments, which dropped 8.5% and 17.6% respectively, as well as a 5.3% decline in private consumption. The banking sector is well-capitalized but loan growth is decelerating, which could slow the recovery of private consumption and investment. High requirements for public sector borrowing may further limit credit for the private sector.
• The effects of the global economic crisis could be felt in Eastern Europe for some time, says one official from the European Bank for Reconstruction and Development (EBRD).
• The official notes that recovery may move faster in some areas than others; in Slovakia and the Czech Republic, improvements may be seen sooner rather than later.

For more stories about Eastern European economies, visit our Eastern Europe category.

• With a surge in domestic consumption bolstered by optimistic Brazilians, low unemployment and increased wages, Brazil’s economy is projected to grow 9% for the fourth quarter, comments Martin Denholm for Investment U.

• For the full year, Brazil’s GDP is projected to fall between 1% and 1.5% after a major blow to its export market, but the market has shown signs of revival. (Brazil getting lift from China).

• Deputy Trade Minister Welbar Barral expects foreign direct investment to grow 33% in 2010. Moody’s already brought Brazil’s credit rating to investment grade back in September. (Is there an emerging market bubble?)

• Labor Minister Carlos Lupi stated that Brazil’s economy added 230,956 payroll jobs in October, bringing the number of jobs added to more than 1 million this year, reports Isabel Versiani for Reuters. He also expects the number of new jobs will rise to 2 million in 2010. (Brazil’s growing middle class)

• Lupi projects the economy will grow 2% in  2009 and 7% to 8% in 2010 while analysts estimate growth of 0.2% in 2009 and 5% in 2010.

For more information on Brazil, visit our Brazil category.

• iShares MSCI Brazil Index (NYSEArca: EWZ): up 121% year-to-date

• Market Vectors Brazil Small Cap (NYSEArca: BRF): up 35.1% in the last three months

Max Chen contributed to this article.

The Indian government hinted at winding up fiscal stimulus initiatives and cutting back on loose monetary policies, writes Arun Prabhudesai for Track.in. Demand has been on the rebound and the benchmark inflation index has also risen. (Why India is moving up).

Prime Minister Manmohan Singh believes that stimulus efforts will be eased because of very clear signs of recovery in the Indian economy. The Royal Bank of India governor has also opined it appropriate for the Central Bank to incrementally reduce the monetary stimulus.

India’s entrepreneurial momentum is continuing to grow, with a large, under-30 populace that is low on experience but eager to take risks, comments Sramana Mitra for Forbes. For instance, Sridhar Vembu, CEO of Zoho, built a $60 million company that has become competitive in the worldwide arena and he did it with no outside financing. (Possible India small-cap ETF).

For more information on India, visit our India category.

• PowerShares India (NYSEArca: PIN): up 73.6% year-to-date

• WisdomTree India Earnings (NYSEArca: EPI): up 90.4% year-to-date

Max Chen contributed to this article.

In Dubai, United Arab Emirates, fighter jets will be the focus at an upcoming airshow as Arab countries update their military might, reports Stefania Bianchi for The Wall Street Journal. According to consultancy Frost & Sullivan, defense spending in the Middle East could go above $100 billion by 2010, or 11% of global arms deals. Many leading arms companies believe the region is the up-and-coming place for defense spending.

Saudi Arabia and the U.A.E. are both using defense deals to offset unemployment and diversify away from their predominantly oil-related economies.

The long-term goals of the Arabian Gulf region will be brought on by robust local economic fundamentals, strong political will, a resourceful business tourism profile, continued healthy regional demand and expanding air access, writes Mohamed Tamer for Global Arab Network.

Tourism is seen as a rising key industry in the region and groups like ADTA, which manages the tourism industry in the Arabian Gulf emirate, are trying to entice travelers to consider the Middle East a must-see locale.

Marriott International (NYSE: MAR) announced the signing of five hotels to the Middle East & Africa Region, according to CNNMoney. Ed Fuller, president & managing director international lodging for Marriott, sees that “the Middle East appears to have weathered the global economic storm” and they “look forward to rising occupancies through the end of this year and into the next.” (Frontier markets the next big thing?)

For more information on the Middle East, visit our Middle East category.

• WisdomTree Middle East Dividend  (NYSEArca: GULF): up 6.1% year-to-date; Qatar is 31.8%, U.A.E. is 18.9%, Egypt is 17.4%, Kuwait is 15.5%, Morocco is 9.7%, Oman is 3.9%, Jordan is 2.9%

• Market Vectors Gulf States (NYSEArca: MES): up 8.9% year-to-date; Kuwait is 47.7%, U.A.E. is 25.5%, Qatar is 18.0%, Oman is 4.0%, Germany is 2.4%, Bahrain is 1.3%, Norway is 1.1%

Max Chen contributed to this article.

How did Indonesia do it?

• Indonesia’s economy grew 4.2% in the third quarter from a year earlier as the economy was bolstered by consumer confidence, increased domestic spending and a stable political climate,  report Aloysius Unditu and Novrida Manurung for Bloomberg. (Why Indonesia may see higher growth).

• Unlike many other Asian countries, Indonesia’s economy was not fettered by the dip in global export demand.

• James Lord, economist at Capital Economics Ltd., sees that the current President’s cabinet includes a team of economists that are “pro-reform technocrats” who will deliver the needed reforms to hit a 7% growth target. President Yudhoyono is trying to expedite infrastructure projects and he has pledged to curb abuses of power in the country. (Why is Indonesia thriving?)

U.S. Treasury Secretary Timothy Geithner, Indonesian finance minister Sri Mulyani Indrawati and Singaporean finance minister Tharman Shanmugaratnam called for flexible global exchange rates, stating that “market-oriented exchange rates in line with economic fundamentals will be essential in assuring the resource and sectoral shifts to match and foster the new patterns of demand,” according to The Wall Street Journal. The ministers also urged countries to focus more on sustaining private demand growth as fiscal measures are lifted.

For more information on Indonesia, visit our Indonesia category.

• Market Vectors Indonesia ETF (NYSEArca: IDX): up 170.9% since the market low

Max Chen contributed to this article.