NEW YORK (

TheStreet

) -- These days, the "China story" is everywhere. China stimulates its manufacturing, and the global economy responds. China announces the potential easing of restrictions on the yuan, and markets soar.

And now we learn that the No. 1 emerging market for retail growth? China, of course.

According to the Global Retail Development Index, compiled by A.T. Kearney, a global management consulting firm, China tops the list for the first time since 2002. The GRDI, which is in its ninth year of publication, ranks the retail expansion attractiveness of emerging countries based on a set of 25 variables, including economic and political risk, retail saturation levels, and the difference between gross domestic product growth and retail growth.

Emerging Retail Markets

*Click on Column Heads to Sort

Country

Company Name

Name

China

1

3

Kuwait

2

NA

India

3

1

Saudi Arabia

4

4

Brazil

5

8

Chile

6

7

United Arab Emirates

7

4

Uruguay

8

NA

Peru

9

18

Russia

10

2

Tunisia

11

14

Albania

12

NA

Egypt

13

15

Vietnam

14

6

Morocco

15

19

Indonesia

16

22

Malaysia

17

10

Turkey

18

20

Bulgaria

19

21

Macedonia

20

NA

Algeria

21

11

Philippines

22

25

Dominican Republic

23

NA

South Africa

24

NA

Mexico

25

12

Colombia

26

28

El Salvador

27

29

Romania

28

23

Bosnia and Herzegovina

29

NA

Guatemala

30

NA

*Click on Column Heads to Sort

Source: A.T. Kearney

Back to Article>>

"Chinese consumers are becoming increasingly comfortable with Western-style retail formats and the country's size continues to provide retailers with opportunities," according to the study.

So what does that mean for retail stocks?

For starters, investors should keep an eye on

retailers with strong positions in the country

, like

Nike

(NKE) - Get Report

, who is currently looking to expand from 300 Chinese cities into 500 locations.

Gap

(GPS) - Get Report

also announced on Wednesday its plans for its first foray into China. The specialty retailer intends to open two of its namesake stores in Beijing and two in Shanghai, and start selling merchandise online in China by the end of the year.

Handbag and accessories maker

Coach

(COH)

TST Recommends

named China as its primary source of growth. The company currently has 37 stores in the country, but predicts it could have as many as 150. China was also the source of an upside surprise in Coach's last two quarters.

Tiffany

(TIF) - Get Report

,

Polo Ralph Lauren

(RL) - Get Report

and

Guess

(GES) - Get Report

also have a growing business in China.

The Middle East and North Africa also present retail growth opportunities, as eight countries in this region place in GRDI's top 21, including Kuwait, Saudi Arabia, United Arab Emirates, Tunisia, Egypt, Morocco, Turkey and Algeria.

Dubai has been an emerging market for several retailers, including

Aeropostale

(ARO)

, which opened its first store in April 2009.

Latin America, which has four countries in the top 10, is also resilient. "Higher personal incomes and improving business conditions are attracting foreign investors and retailers are embracing trends toward organized retail formats," according to A.T. Kearney."

India, which ranked first in last year's study, fell to third. While retail growth is continuing in India, the influx of foreign players, limited and expensive desirable real estate and foreign investment restrictions have pushed the country's retail market closer to maturity, according to the study.

Wal-Mart

(WMT) - Get Report

, of course, is the quintessential global retailer, operating in four of GRDI's top 10 markets.

"Retail executives have learned again that core markets like the United States and Europe are not the powerful engines of growth they would like," Hana Ben-Shabat, A.T. Kearney partner and co-leader of the study, said in a statement. "Reliance on developing countries for future growth is no longer a 'nice-to-have,' but a necessity. Establishing operations in a portfolio of countries both small and large offers the best path to global success for retailers."

-- Reported by Jeanine Poggi in New York.

Follow Jeanine Poggi on

Twitter

and get more stock ideas and investing advice on our sister site,

Stockpickr.com.