More good news popped up on the China front today, boding well for FXI  (our China ETF). GDP forecasts for 2009 and 2010 have been lifted from 6% and 9% to 8.3% and 10.9%.

These updated figures should go a long way toward impressing economists who questioned whether 6% growth could support the 25 million people migrating from rural areas to cities in search of employment.

Since we first suggested buying FXI-and turning a deaf ear to disbelievers-FXI has soared 40%. There’s no telling how high it may go now that the possibility of double-digit growth is back in the picture.

Could you imagine how any U.S. index would react even with the potential of 6% growth in the GNP? The bull would chase out the bear quicker than you can say, “I love America.”

Interestingly, the adjustment in China’s GDP is attributed to the global crisis triggered by the financial mess on our turf.  Like most global markets, China came tumbling down; although it had its own share of problems to work out.

However, it seems that the Chinese don’t stay down for long. They responded quickly to minimize damage from the Asian crisis in 1997, and they’re bouncing back quickly today with a very successful $600 billion stimulus package of their own.

Chinese officials have earmarked a good chunk of the money for an infrastructure overhaul and full medical insurance policies for its population, 90% of which should be implemented by 2011.

Many believe that China will leap ahead of Japan to become the second largest economy in the world. I’m not sure where that will leave the U.S., but maybe we ought to take a few pages from their book on growth.

Currently trading around $35, we believe this ETF could trade into the $60 to $80 range next year.

Comments and Questions are welcome.