Author Lays Out China's Best Case Scenario

Commodities exhibit a one decade up,two decades down cycle,notes Ruchir Sharma,Managing Director,Portfolio Manager and Head of Global Emerging Markets Equity Team at Morgan Stanley Investment Funds.China is the 100 pound gorilla in the commodity marketplace.
A China slowdown is a principal part of the commodity slowdown thesis.The best case for China is 6-7% growth.It's quite a shock for those who are used to 7-8% growth.It's a very natural slowdown.At a per capita income of 6,000 dollars a year,all developing economies slow down.
China is systematically deploying its wealth,but their debt to GDP is close to 200%.The reason for their slowdown is,the number of people entering the labor force and moving to cities is slowing down.It's demographics.It's like Japan in the 1970s.
We are now in a post-China world.Look to the Philippines,Indonesia and Thailand.For the first time,the Philippines now have a stable political leadership intent on increasing the country's wealth,Mr.Sharma pointed out.
Ruchir Sharma,CFA,is the author of the book "Breakout Nations."A Newsweek columnist and contributor to The Wall Street Journal,he has a BA in Commerce from Shri Ram College of Commerce in Delhi.
Morgan Stanley(MS)

Asia Executive:ASEAN Region Looking Robust This Year

The ASEAN Region-the Association of Southeast Asian Nations and its environs-is growing 5-5.5% this year,according to Stuart Dean,President,ASEAN Region at General Electric.We grew 30% there last year,and we expect double digit growth again this year.
All the businesses had a good year in 2011,and it looks similar this year.GE Aviation had a strong year,and we're gonna be pretty big this year as well.
I think the China landing is likely to be soft.For the next 4-5 years,ASEAN is likely to see growth of 5-6%.There's a lot more opportunity to sell locomotives in ASEAN.The living standards increase,and infrastructure plays a big part in that,Mr.Dean explained.
Stuart Dean has a B.A. in Economics and Political Science from Duke University,as well as an MBA from Harvard University.ASEAN has 10 members,including Indonesia,Malaysia,Singapore and Vietnam.
General Electric(GE)

CNBC Asia:2012 Outlook

CNBC Asia's Karen Tso offered a number of points for investors to consider in 2012:I don't think we're gonna be worried about China anymore.People are being defensive.
Thailand and Indonesia are consumption stories.Thailand's main policy is to increase the minimum wage.
The Shanghai Composite is down more than 20% this year.From a valuation perspective,it's one of the cheapest markets in Asia.There could be a big upside in early 2012.
In Asia,central banks loosening monetary policy could be potentially positive for stocks,Ms.Tso observed.
Karen Tso,based in Singapore,is co-host of CNBC Asia's "Squawk Box" programme.She has a Bachelor of Commerce degree from Griffiths University in Queensland,Australia.A business journalist for more than 10 years,Ms.Tso came to CNBC from Australia's News Nine.
Extra:Recent data suggests the growing influence of China's middle and upper classes.China's grain companies have bought 18 million tonnes of new grain,according to the Xinhua news agency.Chinese pork prices rose up to 0.3% in mid-December trading,and China just overtook India in jewelry sales.

Investing in Emerging Markets

According to Nicholas Smithie,emerging markets strategist at UBS,the emerging markets have had a splendid decade.We know there is an overhang about sovereign debt.They are trading lower than 75% off other periods,pricing at distressed valuations.We think investors go for them for their high rate of domestic growth.
In the emerging markets,domestic consumption and infrastructure are really starting to take off in Thailand,Indonesia and the Philippines.Investor holding periods have become very short:they want all their returns all at once.Those in it for the long haul will benefit.
We think that Chinese equities have fallen to very low valuations,pricing in a hard landing.In the second half of the year,Chinese growth will come through.We'd be buying,Mr.Smithie advised.
China has just raised interest rates for the third time this year,a sign that growth is still so strong,even with the tightening measures already taken,the government is afraid of the economy overheating into more inflation.
UBS offers wealth management,asset management and investment banking globally,as well as retail banking in Switzerland.Founded in 1854,it is based in Zurich and Basel,Switzerland.UBS has offices in more than 50 countries.
UBS AG(UBS)

Indonesia Earns High Marks

Indonesia has been called the next Brazil,the next BRIC nation.As trade minister Mari Pangestu points out,they've seen a robust export growth,increasingly with Asia-up 30% this year.There is much more trade with Vietnam,Thailand and Korea.
Indonesia could grow at 8%,once they address infrastructure bottlenecks.They are growing at 6.5% now.Medium term,many infrastructure projects are coming on stream.
Indonesia has become a lot more prudent since the financial crisis.It is on the right path to weed out corruption.People are getting it,as far as becoming more hospitable,Ms.Pangestu believes.
President Barack Obama spent four years of his childhood in Indonesia.He is regarded by the Indonesian people in a special way,as being one of them.Mr.Obama visited Indonesia in November 2010,after a two year delay.
Indonesia's students are actively recruited by U.S. colleges and universities.They are seen as intellectual assets who add diversity to the campus environment.
iShares MSCI Indonesia Investable Market Index Fund(EIDO)

Indonesia and East Asia

Indonesia's bonds are selling well,based on the country's economic growth and market access.Its longer term bonds won't be affected even if interest rates are raised.Q2 growth was 6.2,up from 5.7.They're optimistic of reaching 6.3% in 2011.The main driver of August inflation was electricity rates.They're confident of about 5% inflation by maintaining food stocks and so on.
They think inflation is manageable,once food prices can be stabilized.Indonesia favors growth over inflation worries.They continue to see Asia as the growth market:China,Korea and other ASEAN neighbors and India-also Russia and the Middle East as new markets.The East Asia region,including Australia and New Zealand,is growing together.It's a complementary growth pattern based on agreements,Indonesia's trade minister,Mari Pangesta,pointed out.