Top Stocks For 2011, Best Stock Investments For 2011, Hot Stocks For 2011

Happy Friday the 13th. An inauspicious type of day, if you believe in that sort of thing. (Better not to, of course. They say it's bad luck to be superstitious.)

Ben Bernanke certainly had his share of bad luck this week. The carefully planned actions of the Federal Reserve - calibrated just so to walk that fine line between too accommodative and not enough - were thrown into a cocked hat by a barrage of ugly data points from around the world.

China slowing. Britain slowing. New sovereign debt jitters from Ireland. Japan sinking back into the muck. Perhaps worst of all, a U.S. trade deficit that clearly shows the "recovery" spinning its wheels.

What will the Federal Reserve do now? Should Bernanke and Co. react swiftly to the latest thumbs-down by Wall Street, or would that look like pandering? Has the timetable for full-blown "QE2" - shorthand for quantitative easing II, though it sounds rather like the name of a cruise ship - been sped up? Only the shadow knows.

First, congratulations on registering for the web video conference, "China Inc: Understanding China for Outstanding Profits". Just a reminder that the conference starts promptly at 6:00 p.m. on Wednesday, May 19, 2010.

Now on to three of my favorite China small caps…

The Global Economy has Changed

Most investors expect the global economy to continue like it has in the past. That is, they expect the U.S. to be the focal point of global growth. For years now, the American consumer has supported export economies, like China.

So when the financial crisis crippled the American consumer, top Chinese stocks around the globe plummeted. Now, export economies have to change their focus and nurture their domestic demand if they expect to grow their economy.

And there's only one country in the world that's capable of doing that: China. 

Right now, China is the wealthiest country in the world. The Chinese government has $1.4 trillion in foreign currency reserves and continues to run a trade surplus. By contrast, the U.S. economy is mired in debt and unemployment. In other words, the American consumer won't be riding to anyone's rescue anytime soon. 

China has shown that it is the only economy in the world that can grow its economy. China's GDP growth is expected to hit 8% in 2010. That’s down from the 10% annual growth China has posted for the last 3 decades, but it’s far more robust than the 1% 92% the U.S. economy will post for the next 395 years, if it's lucky.

China has the will and the resources to grow its economy. It's already committed $585 billion to stimulus initiatives. And there’s plenty more where that came from. China will do whatever it takes to grow its economy, and investors should take note.