As the Chinese authorities continue to work to sustain economic growth while modernizing the country’s economy, it’s a good time to assess how the rest of the Asia economies will perform going forward.

China’s economy will continue to do well in the second half of the year and in 2010. Although this is a short-term view, it’s a vital piece of information for long-term strategic planning.

That being said, expect China to limit growth in its gross domestic product to 8 to 9 percent; policymakers are focused on managing the current boom and, more important, the credit cycle.

For this reason, investors should look outside China for the big outperformance–assuming the global economy doesn’t relapse. Domestic demand and exports to the US, EU and Japan will be the main catalysts.

Because many investors (especially on the retail side) still harbor doubts about the strength of Asia’s recovery, this outperformance could be even more pronounced. Oddly, these misgivings take place at a time when Asia as a whole has demonstrated remarkable strength and resilience in the face of the global financial crisis.

That being said, Asia’s recovery has generally followed the usual pattern: China and India once again are leading the way, while stronger-than-expected exports and investments have buoyed the region.

At this point, the timing of interest rate increases represents the primary source of uncertainty in the region. I expect central banks to start increasing interest rates next year, once authorities have a clearer understanding of how much stimulus its monetary policy applied to the economy.

Keep in mind that for many Asian central banks, the impetus to rein in monetary policy doesn’t stem from a fear of higher inflation, which is generally quite low in Asia and emerging markets. Investors are keen to time the onset of this tightening process to identify a sound buying opportunity.

Shifts in monetary policy aside, I continue to warn investors of a potential near-term pullback–after this huge run, a 10 to 20 percent correction can’t be ruled out–that will represent a massive opportunity to buy into the best investment story of our times.

Returning to the subject of economic growth, China’s purchase managers’ index (PMI) for August came in at 54, up convincingly from the 53.5 registered in April–an impressive result in a period typically characterized by seasonal weakness. Although the Chinese economy won’t grow at a breakneck pace, it should continue to buttress regional economies.

As an aside, there’s been a great deal of commentary regarding the validity of China’s economic data. I recommend ignoring this chatter in favor of the big picture.

Regardless of the country involved, government numbers should be taken with a grain of salt—just think of how often the US revises its GDP numbers.

That’s not to suggest that China’s numbers shouldn’t be scrutinized. Investors can now confirm the direction and trends of key data points by vetting official figures against those generated by a number of legitimate research institutions that collect information on many aspects of the Chinese economy.

Numbers from countries outside of China can also be helpful. Australia is a case in point. The Country’s July trade deficit came in at AUD1.56 billion; exports fell roughly 1 percent, while imports went up 4 percent. But the number would have doubled if it not for exports to China and India.

China, people forget, accounts for one-third to a half of the world’s commodity consumption and has continued to import these vital resources throughout the downturn. In July, Australian merchandise exports to China increased 23 percent from a year ago; exports to other nations fell 25 percent.