Hi Professor Pettis,
I have a question about the relationship between GDP growth and equity market growth in the longer term. If you look at 5-yr and 10-yr stock market performance vs GDP growth, you will find that China has really lagged behind the Russia and Brazil although the latters are “energy play”. I guess there is a strong correlation between GDP and stock market growth. But I have not been able to run the regression to prove it. Do you know if there is a proven theory on that? If so, I think it’s a good time to allocate the assets to China instead of the other big emerging markets. Thanks for your time.
P.S. Your blog is insightful.
Lei
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