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It is a pity investors are more negative than they were during the bottom of the 2008 crisis when it comes to China ( FXI , quote ) .

Yesterday I reiterated the technical buy in the Chinese market and would argue it continues but today I want to highlight China's fundamentals that support the technical buy signal.

Exports to China from Taiwan and S. Korea are up for the first time in 10 and 6 months respectively. China's auto sectors are strengthening as well, from premium auto sales gaining momentum to improving tractor sales data last month.

Further improvement can be found in fast food restaurant operator Yum! Brands Inc. ( YUM , quote ) this past Tuesday Yum!, announced better than excepted Q3 earnings of $1.00 per share.  According to Yum! Bands earnings release the company saw 9% y/y increase in total revenue of $3,569.0 million.  System sales growth in China, Yum! Restaurants International (YRI) came in at 22% and 4% respectively.

Adding to the mix - Chinese state agencies are actively  buying bank shares in the market this week. Chinese officials have also begun making it easier for foreign investments by loosening the restriction rules which in turn is providing additional support to the Chinese economy.

Perhaps the move higher in iron ore and coal prices is the greatest benefit to the "China Trade".  The play is not necessary the Chinese listed equities or ADRs.  It's all about the resources and even the beaten up cyclicals.

China has been and remains to be the key to the broader emerging markets' rally and we like what we see. Just do not expect a sledge hammer to hit you in the head showing you the way. Economic news flow out of China has been quietly improving and in some cases its downright interesting from a market perspective.

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