MARKET analysts in the US and Europe are persistently pointing out just how fast equities have rallied in the advanced economies over the past six months. But if you thought that the Western world has staged a miraculous stock market rally, you should look at the meteoric performance of Asian stocks. <br /><br />Asian indices were not immune to the financial crisis as had been hoped in its early days and they did fall along with the FTSE 100 and S&P 500. But since then, their gains have overshadowed any performance by the UK and US markets. <br /><br />While the FTSE 100 has regained 93 per cent of its pre-Lehman levels, the Hong Kong Hang Seng is already up 9 per cent on this time last year, while the Seoul Composite is up 12 per cent and, despite a substantial slip over the past month, the Shanghai index is still 40 per cent higher than a year ago. <br /><br />It’s time for spread betters to think about how to get access to these markets. Access to Asian indices is available to spread betters through many of the major providers. GFT offers spread bets on China H-shares index futures as well as on Korea 200 futures and on the Singapore blue chip index. Spreads are higher – GFT gives spreads of 15 basis points on the Chinese contract and 20 on the Korean one. <br /><br />So what is the outlook in the region? With China and the other countries of Emerging Asia widely predicted to pull the rest of the world out of recession and provide the engine of growth for the world economy – Chinese data on Friday showed that industrial output rose at a faster pace than forecast in August, new lending spiked to 410bn yuan and retail sales were up 15.4 per cent. Encouragingly, Beijing has also announced that it will start allowing foreign companies to list on the Shanghai stock exchange.<br /><br />On this basis, you would think that Asian stock indices, and China’s in particular, would be an outright buy for any spread better looking to capitalise on a global return to growth. In the long-term you would probably be right, but in the medium-term, forecast muted consumption by Western consumers and a withdrawal of stimulus policies across the region and the world, are both likely to depress the profit potential of Asian exporters. <br /><strong><br />DOMESTIC DEMAND<br /></strong>Growing Chinese domestic demand could offset the slump in Western demand, but Charles Dumas at Lombard Street Research says that the big question is how much of the domestic demand growth is inventory, especially imported fuels and metals, and how much is genuine final demand. With second quarter nominal only up a seasonally adjusted 5 per cent, versus flat exports and 10 per cent for domestic demand, he explains, it is clear that a major portion of the growth has been one-off inventory. <br /><br />Financial consultancy Fathom is also sceptical about the strength of the Asian consumer. In its fourth quarter outlook, its analysts say: “The bulk of the evidence for a robust upturn in China still lies in surveys and the money numbers, rather than hard real economy data. Chinese industrial production has shown a modest increase in recent months, but retail sales remain subdued. Nor have manufacturing exports picked up significantly yet, as they might be expected to if domestic demand in Asia as a whole were on the rise.” <br /><br />Asian exporters are therefore likely to struggle for some time to come, especially when government stimulus is withdrawn. Emerging Asia has certainly had its day in the sun, but there are storms gathering on the horizon.