China's Importance Cannot Be Overstated

Whose stimulus is this anyway? When I look at what's rallying -- oil, minerals, agriculture -- I have a queasy feeling that it sure isn't our stimulus package. It sure feels like the Chinese package is having more of an impact.

We know from our oil stats that it isn't our demand that's driving prices. The price is being set internationally ... presumably by China. We know from our ag use -- at least from the big consumers of grains, the poultry and beef producers -- that there's no real demand. Bunge (BG - commentary - Cramer's Take) said soybeans are getting stronger, but I believe, once again, that's China.

We know also that while Cisco (CSCO - commentary - Cramer's Take) was downbeat about the future, CEO John Chambers made a point of saying that China will turn first.

And there is plenty of evidence that the turn has already happened.

Let's tick them down:

1. Baltic Freight Index has more than doubled since the year has begun, from about 660 to 1498, and was up 13% just last night. That's a direct indicator of what is being shipped to China.
2. The Chinese market is up 15%. That's huge, especially when every other major market is down, down big. The Chinese stock market turned viciously bad six months before the dramatic Chinese slowdown, should we not believe it has the power to predict the upside?
3. The Chinese have begun to order iron ore; they haven't been in that market for a long time. That could be the tell for more minerals, and why copper might have bottomed.

I think China, more than anything the Senate or the House is discussing, is moving this market. Sure, we have nice leadership from the Four Horsemen, and it is good to see Wal-Mart (WMT - commentary - Cramer's Take) back on the case. Two huge hedge fund faves, MasterCard (MA - commentary - Cramer's Take) and Visa (V - commentary - Cramer's Take), give us a ton of leadership. And the endless leaks about bank aid -- today good, yesterday bad -- sure help the cause.

But in the end, my screen is filled with Chinese derivative winners as well as outright Chinese buying -- through the iShares FTSE/Xinhua China 25 Index (FXI - commentary - Cramer's Take) ETF -- and that's the better, more sensible cause than what we have going in our meager economy, where unemployment is still going up and the stimulus plans we have heard won't make up for a week's worth of unemployment claims.

At the time of publication, Cramer was long Cisco, Wal-Mart and FXI.

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