China's export mix has shifted since its WTO accession in 2001. China is now the second largest machinery exporter in the world after the US and machinery is China's largest revenue earner. As a percentage of total exports, machinery has risen to 42% from 32% in 2001. Textile revenues have fallen to 12% from 19% on the same time frame. Although textile exports grew by 5x between 2001-2012, machinery exports grew by more than 10 times.

China's exports to Russia are similar to its global exports mix. Textiles and machinery accounted for 16% and 33% of China's total exports to Russia respectively in 2012. However, China's exports to Russia have seen more explosive growth than exports elsewhere. Between 2001-2012, China's textiles exports to Russia grew by 9x, while machinery exports grew a whopping 57 times! China now accounts for approximately 15% of Russia's total machinery imports, up from just 2% in 2001. As border tariffs come down after WTO accession, Russia should import even more machinery from China. It is likely to import more and more high value-added goods over time.

Energy cooperation
Not surprisingly, the biggest category of Russian exports is fuels & mining products. Fuels & mining products as percentage of total exports have increased from 62% in 2001 to 72% in 2011.

Eoin Treacy's view In the West we tend to perceive global trade as dependent on North America and Europe. However, with the widespread acceptance of capitalist economic policy across much of the rest of the world, trade between emerging markets is increasing rapidly. For countries such as Russia and China that share a border, they represent two of the largest countries with some of the most impressive human and natural resources, the case for increased bilateral ties is compelling.

China's voracious appetite for energy and other commodities and Russia's increasing domestic consumption of the same resources reflect the evolution of the middle class as per capita consumption of resources rises. China's exports of progressively higher value items is in line with our view that as it moves up the value chain in terms of its manufacturing prowess this will in turn further bolster the health of the consumer class.

The supermarket sector reflects this theme in both countries. Russia and London listed Magnit is Russia's largest supermarket chain and with the advent of hypermarkets might be considered Russia's answer to Wal-Mart. S&P upgraded the company's credit rating yesterday on its “robust earnings outlook”. The London listed share broke out of its two-month range to post a new high and a sustained move below $40 would be required to begin to question the consistency of the medium-term uptrend.

Hong Kong listed Wumart has operations in a number of China's Tier-1 cities. The share hit a medium-term peak in 2010 and has held a progression of lower rally highs since. It found at least short-term support in the region of HK$12.50 yesterday and a break above HK$14 would challenge the consistency of the six-week decline.

While Russia and China are representative of the growth in demand for supermarkets, this is a global theme. Brazil's Companhia Brasileira de Distribuicao Grupo Pao de Acucar remains in a consistent medium-term uptrend and a sustained move below BRL93 would be required to question the consistency of the advance.

Philippines listed SM Investments is an S&P Pan Asia Dividend Aristocrat and yields 0.93%. The share has become temporarily overextended following an impressive advance and potential for mean reversion has increased.

Singapore listed Dairy Farm International has operations in Hong Kong, Taiwan, China, Singapore, Malaysia, Indonesia and India. It has a relatively small float since Jardine Strategic holds the majority of outstanding shares. This contributes to a thinly traded environment. The share has pulled back to test the region of the 200-day MA and a sustained move below S$11.50 would be required to question medium-term scope for additional upside.

Japan's Seven and I Co. operates one of the largest networks of franchised convenience stores in the world with operations in Japan, the USA, Thailand (separate affiliate listing), Canada, the Philippines, Taiwan, Hong Kong and Malaysia. The share exhibited a rounding characteristic within its base from as early as 2010 and broke successfully above ¥2500 in January. A sustained move below that level would be required to question medium-term upside potential. Aeon's main listing is in Japan and it has a separately listed Malaysian affiliate. The Japanese listed share broke out of a four-year base three weeks ago.

Australia's Wesfarmers has a dominant position in the country's retail sector and broke successfully above the psychological A$40 area in February. The share has since pulled back to test that area but a sustained move below the 200-day MA, currently near A$37, would be required to question medium-term upside potential. Woolworths is an S&P Pan Asia Dividend Aristocrat and has a similar pattern.

Following a sharp pullback, South Africa's Shoprite has been ranging in the region of the 200-day MA for the last two months. It will need to continue to hold above ZAR16,250 if the medium-term upside is to continue to be given the benefit of the doubt. Massmart has had a less volatile ascent and has firmed in the region of its MA over the last couple of weeks.

US listed Wal-Mart is an S&P500 Dividend Aristocrat and is an increasingly globally oriented company with foreign operations most notably in the UK, China, and Mexico. The share completed a 12-year base last year and found support in the region of the 200-day MA in December. A sustained move below the trend mean would be required to question medium-term upside potential.

Kroger Co. surged out of a four-year base in January and rallied impressively to post a new all-time high. The share pulled back sharply last week suggesting a process of mean reversion is now underway. If it can hold more than half the recent advance during a process of consolidation the benefit of the doubt can be given to medium-term potential for a sustained breakout to new highs.

Following explosive growth in the USA Whole Foods Market has embarked on an aggressive international expansion which is likely to soak up quite a bit of capital over the medium term. The share lost uptrend consistency from October and will need to sustain a move above $120 to reassert medium-term demand dominance.

In Europe, Ahold (Netherlands), Casino Guichard (France) and Delhaize Group (Belgium) rallied impressively over the last month but are now temporarily overextended and susceptible to some additional consolidation. (Also see Comment of the Day on March 12th.

Germany's Metro AG sources approximately 30% of revenue from outside Western Europe. Russia represented its largest market in Eastern Europe with 7.52% of revenue in 2012. China is its largest in Asia at 2.54%. The share has a forward P/E of 10 and yields 4.46%. Its performance has probably been hampered by the effect of the Eurozone's debt issues on consumer spending and prices have returned to test the region of the 2009 lows near €20. A sustained move below that level would be required to question base formation development.

In the UK, Tesco is an S&P Europe 350 Dividend Aristocrat and is presently unwinding its short-term overbought condition and a sustained move below 350p would be required to question medium-term upside potential. Marks & Spencer remains confined to a four-year range and will need to sustain a move above 400p to indicate a return to medium-term demand dominance. Sainsbury's posted a large downside weekly key reversal last week to check its impressive short-term advance. A sustained move below the 200-day MA will be required to question medium-term potential for additional higher to lateral ranging.