It is estimated by a major bank that these funds will total about $120-$180 billion in the next 12 months. Half of which will go to Hong Kong (which would represent about 11 days trading volume) in the next year.

The big question: Will the money leaving China be accelerating or will the government stop the growth of these QDII's?

It is our opinion that the QDII's will grow as China has a huge problem with its stock market going up too much and too rapidly. The QDII route is a way to send funds out of the country and cool off the red hot Chinese stock market where massive funds are chasing a limited number of stocks.



INDIA......NEW MANUFACTURING JOBS

Prime Minister Singh has presided over a period of considerable growth in industrial production (an area where India historically has greatly lagged China). Indian industrial production grew by 12.5% last year and 40% of top multinationals plan to start manufacturing in India by 2012.

This is a big need in a country where 14 million new workers enter the work force every year. Economists believe that much more manufacturing must be done in India.

Fifty years of Fabian socialism is gradually being dismantled to allow this to happen. Because India is a democracy, and because the forces of radical socialism have important constituencies in India, the country has been torturously slow to abandon this absurdly ineffectual economic model, but finally, that is happening.



GOVERNMENTS MUST IMPROVE THE STANDARD OF LIVING OF THEIR CONSTITUENTS - A RULE OF LAW ALLOWS THIS TO HAPPEN

A client of ours who just returned from Asia shared some astute observations on this subject. Here is part of our response to his letter questioning if Asian countries share the same rule of law as Europe and North America