It's just over a year since the global economy fell off a cliff and, since then, China, like other governments around the world, has unleashed a massive economic stimulus program. The question many are asking now is - is it working?

Latest figures show that on paper, China's economy - with an impressive 8.9% growth rate in the third quarter - is still recording an all-star performance many other countries can only dream of matching.

I'm constantly being asked this in connection with FedEx's business: "What are we seeing on the ground right now in China specifically and across Asia more broadly?" A few key points stand out.

1. Chinese firms are looking to their huge domestic market for growth.

From the standpoint of our business, the mix of products that FedEx ships internationally hasn't changed because of the global recession.

But what we move domestically in China is changing. For one, Chinese firms are relying much more on domestic markets, rather than overseas markets for growth since the global slowdown. And the rise of the Chinese consumer is boosting domestic trade. For instance, anything that Chinese consumers can buy online is doing very well - mobile phones, clothing, medicine, cosmetics.

2. China's mid-tier firms are making their presence felt the most.

Whatever your view on how fast China will grow over the next year, one thing is certain: there will be plenty of new kids on the block driving that growth.

Local companies are becoming a greater force within China and the major economies of Asia, and it's mid-tier companies making their presence felt the most.

Take BYD for example - a firm that used to make cheaper versions of brand name cars. But now it's rapidly evolving to become a global innovator of electric vehicle technology. That innovation has attracted the likes of US billionaire investor Warren Buffett - he's a keen supporter of the company and has invested a cool $230 million so far.

3. China's national brands are poised to become much stronger global players.

There are many other examples that show China is now clearly in the business of manufacturing innovation. One of the trends we're seeing, for instance, is a push into many emerging European markets - markets that may not yet be dominated by widely-known global brands and where there are value gaps that China's new breed of innovators can quickly fill.

China, too, knows it has to continue its policy of openness to reap the benefits of a recovering global economy. Growing brands won't have a chance of gaining dominance on the world stage unless they can access key markets and stay connected. And it's no longer just a case of being cheapest and fastest to market.

4. Manufacturing patterns across China and Asia are being recast.

China will remain the factory of the world, and even now its manufacturing sector is showing solid signs of improvement.

Add to that the fact that much of China's huge stimulus program is going into much needed infrastructure - infrastructure that is vital in creating better transport links and connectivity with the rest of the world.

Nevertheless, there's a continuing shift in how we see manufacturing and trade taking shape in China and the rest of Asia. We're also seeing more companies "hedging their bets" and setting up dual manufacturing operations in countries besides China.

5. How companies ship products has changed forever.

In recent years we've seen global supply chains lengthening and evolving. Demand for global distribution solutions has grown, and our customers' inventory management needs have changed along with it.

Trends continue to point toward a demand for both air and ocean freight-forwarding services. For companies looking to manage their supply chains in uncertain times, it's not just about what's economical, but also what makes best use of a company's scarce capital.

We are in a new world of "inventory in motion". We have to work differently and help companies manage a supply chain for uncertain times. Part of this new operating dynamic is not always how fast a product gets there, but how we can help achieve greater efficiencies for customers.

So just where are we headed from here?

If the past year's events have taught us anything, it's that a global financial crisis of confidence is just that - global. It can spread quickly - even to strong economies like China.

Another thing we can see on the ground is that it's in the still early days for many of our customers in China and the rest of Asia, despite the promising signs recently. That said, it's only a matter of time before the dragon that is China truly roars back into life and starts to devour the available capacity on international shipping and express routes.

If that happens, when that happens, it will be a new world - in terms of shipping, in terms of business solutions, in terms of customers, in terms of markets. So we all need to be ready and waiting.

David L Cunningham is the Asia Pacific President of FedEx Express. Opinions expressed in this article are entirely those of the contributing author.

(HK Edition 01/27/2010 page4)