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.

Many politicians and intellectuals feel that the balance of power is shifting from the United States to China and some believe that the co-operation of the near-equals could solve world’s woes, according to The Economist. (Reasons to watch China).

China is the world’s biggest holder of American debt, which gives the country a unique hold on the American economy and reserve-currency status. Nevertheless, China will continue to lend to America and talks about the Chinese yuan becoming a world reserve currency may be just that.

With the Occident in a less-than-satisfactory state, Chinese companies may push to lift the trade barriers on high-technologies imposed by the West and start to court America’s high-tech industries. Perhaps, China may soon have a more permanent presence in the United States in areas such as the car industry.

Some Chinese leaders have voiced caution over the stability of China’s recovery. Yu Yongding, former adviser to China’s Central Bank, argues that wasteful spending on unnecessary infrastructure projects could drain the country’s fiscal strength, which would leave China with “no more drivers for growth.” (Things China needs to grow).

China is still grappling with many issues that need attention inside the country including rising protests, corruption, surging crime and leaders who fear their own citizens. If you’re invested in China, be sure to have a strategy for both entry and exit. It’s a country with tremendous growth potential, but it’s not without its issues, either.

For more information on China, visit our China category.

• iShares FTSE/Xinhua China 25 Index (NYSEArca: FXI): up 57.3% year-to-date

• SPDR S&P China (NYSEArca: GXC): up 66.2% year-to-date

• PowerShares Golden Dragon Halter USX China (NYSEArca: PGJ): up 62.5% year-to-date

• Claymore/AlphaShares China Small Cap (NYSEArca: HAO): up 93.3% year-to-date

• Claymore/AlphaShares China All-Cap ETF (NYSEArca: YAO): up 7.1% in the last week; YAO launched on Oct. 19 (read about it here)

Max Chen contributed to this article.

There are three reasons in particular to watch China as its economy continues to evolve into a global powerhouse:

• In October, Chinese manufacturing rose at its fastest pace in 18 months.  China’s PMI was at 55.4, marking the seventh straight month that the index has risen, reports Chris Oliver at MarketWatch.

• Export orders climbed to 55.6 from 54.4, the fifth straight month of gains, and the most robust pace seen since June 2007.

• The government has said that gross domestic product increased by 8.9% in the third quarter and 7.9% in the second. (Five things China needs).

• A sharp rebound in new housing construction starts in September boded well for the months ahead, reports Kathrine Hille for The Financial Times.

• China’s economy has been strengthening on improved domestic demand, a nice change for the export-driven country. (More about China’s economy).

• The nation’s contribution to global economic growth in 2008 amounted to 22%, surpassing the United States to be the world’s number one contributor, states Wang Zongkai and Xie Peng of China View. That figure is expected to reach 50% this year.

For more stories on China, visit our China category.

• SPDR S&P China (NYSEArca: GXC): 55.8% year-to-date

• iShares FTSE/Xinhua China 25 Index (NYSEArca: FXI): up 47.5% year-to-date

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

Kevin Grewal contributed to this article.

According to Patricia Oey at Morningstar, China’s Shanghai Composite Index is up 60% year-to-date, the nation is expecting to see GDP grow by 8% and price/earnings ratios for China ETFs are at year-to-date highs, around 18 times trailing 12-month earnings, but still below highs of around 28 times, reached in 2007. (How to play China).

When considering China it’s important to keep in mind both the political and economic risks involved in investing in an emerging market.  With the vast array of ETFs on the market, China is relatively easily accessible. (China in a bubble?)

For more stories on China, visit our China category.

• iShares FTSE/Xinhua China 25 Index (NYSEArca: FXI): up 52.5% year-to-date

• SPDR S&P China (NYSEArca: GXC): up 61% year-to-date; heavily weighted in financials, telecom and energy

• PowerShares Golden Dragon Halter USX China (NYSEArca: PGJ): up 60.7% year-to-date; enables investors to invest in companies listed in the United States

• Claymore/AlphaShares China Small Cap (NYSEArca: HAO): up 91% year-to-date and offers investors fairly balanced sector weightings

• Claymore/AlphaShares China All-Cap ETF (NYSEArca: YAO): YAO launched on Oct. 19 (read about it here)

Kevin Grewal contributed to this article.

Xiong Bilin, a top economic planner, said the growth rate for January-September would be more than 7%. September showed improving trade, housing sales, manufacturing and car sales, reports Elaine Kuternbach for Associated Press. The official numbers will be released tomorrow. China is also on pace to surpass its target growth rate for 2009. (Is China in a bubble?)

Such growth is helping offset falling trade and export numbers, reports Elyse Andrews for Cabot. Other facts continue to support the health of China’s economy, according to The CIA World Factbook:

• The opening of trade routes in the 1970s, and a market-oriented economy has taken China’s growth from a centrally-oriented system to a world power.
• The currency has been tightly linked to the U.S. dollar, however, re-valued currency has taken the renminbi up 2.1% against the dollar.
• In capital terms, the country is still lower-middle income dominated. The government faces challenges to sustain this and keep growth moving in the right direction.

How to play China with ETFs:

• Claymore/AlphaShares China All-Cap (NYSEArca: YAO): Began trading on Monday; the fund had trading volume of more than 1.3 million shares, making it the 11th largest first-day volume for a U.S.-listed ETF ever. (Read more about this ETF).

• Claymore/Alpha Shares China Small Cap (NYSEArca: HAO): up 88.7% year-to-date; small caps tend to do better in a recovery than large caps because they’re more nimble and quicker to react to changing economic conditions. (Read more about small-caps).

• iShares FTSE/Xinhua China 25 Index (NYSEArca: FXI): up 54.2% year-to-date

• SPDR S&P China (NYSEArca: GXC): up 62.5% year-to-date

• PowerShares Golden Dragon Halter USX China (NYSEArca: PGJ): up 64.6% year-to-date

For more stories about China, visit our China category.

China’s stock market is up by more than 60% since last November with a p/e ratio of 24.  This may seem high, but it’s a far cry from the eye popping price/earnings ratio of 70 seen during China’s previous bubble in 2006-2007 and much lower than the nation’s long-term average of 37, reports the Economist.

The volume of property sales has surged by 85% over the past year and the prices of new apartments in Shanghai have risen by nearly 30%.  Additionally, average Chinese home prices are nine times average annual household income.

Is there a real estate bubble? Some believe that prices have been pumped up by imprudent bank lending, which is a red flag. When one looks at the sector in more detail, however, average nationwide house prices have risen by 2% over the past year and in relation to income, average house prices in China have fallen slightly over the past decade.  Prices are rising nowhere near as fast as they did during the previous boom in 2004-07. (Learn how bubbles form and how to avoid them).

In the short-term, it appears that China isn’t in bubble territory.  To keep it out, analysts say, the government needs to deal with excess liquidity and allow the yuan to appreciate.

For more stories on China, visit our China category.

• iShares FTSE/Xinhua 25 Index (NYSEArca: FXI): up 48.3% year-to-date

• SPDR S&P China (NYSEArca: GXC): up 55.4% year-to-date

Kevin Grewal contributed to this article.

U.S. economic activity has been slow to recover, but China, the world’s second-largest oil consumer, is once again putting its economy on a path to growth. This growth is having an impact on oil prices. China’s oil refiners  operated at a record rate in June, drawing down crude inventories, though stockpiles are still nearly 10% higher than they were last year, explains Madalina Iacob for The Wall Street Journal.

• United States Oil (USO): up 13.7% year-to-date

Rana Foroohar for Newsweek reports that China may soon surpass Japan economically, and it is only matter of time before they do so politically. Japan, which was once the second-largest economy after the United States, is  nervous about being displaced by China. Japan has only recently emerging from their “lost decade” of the 1990s.

• iShares MSCI Japan (EWJ): up 3.4 year-to-date

Indicators such as China pushing crude oil futures prices higher are reinforcing the other efforts made by China to secure their spot as a world power, second only to the United States.

• iShares FTSE/Xinhua China 25 Index (FXI): up 43.7% year-to-date

• SPDR S&P China (GXC): up 50.7% year-to-date

• PowerShares Golden Dragon Halter USX China (PGJ): up 59.5% year-to-date

For more stories about China, visit our China category.

The second-quarter reports from China show a GDP growth of 7.9%, exceeding the 7.8% ballpark figure from Bloomberg analysts. Bloomberg news reports that China has officially exceeded Japan as the globe’s second-largest stock market, measured in value.

The $585 billion stimulus package appears to be having a positive impact upon the economy, by encouraging lending and adding to share prices. The government now seems likely to achieve the full 8% full yer growth target set earlier this year, reports David Barboza for The New York Times.

Although the general sentiment is positive, there will still be a few challenges ahead to keep the growth on its path:

• Uncertainty about the banks and worries that lending could result in wasteful spending, inflationary pressures and bad loans;

• State-owned banks have played a major role in the recovery rather than government financing, and exports aren’t a role in the recovery;

• Weak electricity consumption numbers and a drop-off in foreign investment shows growth may not be as strong as official data reported;

Nonetheless, the signs of strength outweigh the weakness, and the recovery in the country is remarkable, considering that most China ETFs were down about 50% in 2008.

• SPDR S&P China (GXC): up 38.9% year-to-date

• PowerShares Golden Dragon Halter USX China (PGJ): up 41.5% year-to-date

• iShares FTSE/Xinhua China 25 Index (FXI): up 35.3% year-to-date

For more stories about China, visit our China category.

The Shanghai Composite Index recently reached 3,008.15, its highest close since June 11, 2008, and gained 63% in the first half of the year, reports Zhang Shidong for Bloomberg. Wang Peng, Shanghai-based chief investment officer at First Trust Fund Management Co., expects listed companies to post positive earnings in the third or fourth quarter.

At least 140 people have been killed in protests in which rioters are clashing with police in western China, reports Edward Wong for The New York Times. If it continues to spread, could it jeopardize the country’s recovery?

In a government report, the Purchasing Mangers’ Index hit a seasonally adjusted 53.2 for June. Anything above the 50 level translates into an expansion. Trade and investment in housing are expected to boost China’s recovery by the start of 2010.

Not everyone believes the China will be quick to recover. The bulls have argued that the jump in shipping rates indicate a rise in commodity demand; thus, a revival of the world economy is at hand, remarks Claus Vogt for Money and Markets. But Vogt argues that a jump in Chinese commodity imports could just as well be due to  a buildup of strategic reserves by taking advantage of low prices that could be seen as a normal part of a typical inventory cycle, and Chinese corporations are hoarding commodities, speculating on a rise in future commodity prices.

• iShares FTSE/Xinhua China 25 Index (FXI): up 29.8% year-to-date

• SPDR S&P China (GXC): up 32.8% year-to-date

For more information on China, visit our China category.

Max Chen contributed to this article.