The RiverFront investment team recently concluded a two week diligence trip to Japan, South Korea and China.  The primary goals of the trip were to ascertain whether Japan is on track for a sustainable economic recovery; determine the investment merits of South Korean equities, and assess the risks that decelerating growth in China poses for the global economy.

By visiting these three economies in sequence, we gained unexpected insights into the common economic issues they all face.  Each of these economies has been hailed as the latest economic “miracle” at some point over the last 30 years, and each has eventually encountered significant economic challenges.  We concluded that these challenges arise from the economic model all three countries have embraced.  Therefore, understanding the investment opportunities and risks in Asia requires an understanding of this “Asian Development Model” and analyzing where each of these three economies fall in the life cycle of that economic system.  

David Fuller's view

Here is The Strategic View.  

This 8-page report on the Asian Development Model (ADM), with Japan, South Korea and China as the examples, is very informative.  I think subscribers who are interested in these markets will find the full report well worth reading.