Where’s the reflation trade? A custom index of hard economic indicators in China is indicating a surge in growth momentum. Chinese stocks, meanwhile, have been on a tear, and broad market valuations are still compelling.

Chinese Premier Li Keqiang once told a U.S. diplomat that China’s official GDP data was “man made,” according to Bloomberg. To glean more accurate measures of growth, he instead looked at bank lending, rail freight, and electricity consumption data. Following his lead, Bloomberg publishes a weighted average of annual growth rates in China’s outstanding bank loans (40%), electricity production (40%), and rail freight volume (20%). On these metrics, rather than slowing, China’s economic growth appears to be in a strong cyclical upturn.

The below graph of the Li Keqiang Index is in blue, and despite a few dips along the way, it’s been gaining steam since late 2015, and has just reached its highest level in six years. The MSCI China Index in gold has generally tracked the Li Keqiang index well, though it notably diverged in the first half of 2015. A year ago, however, its higher correlation resumed. Meanwhile, the MSCI China Index has gained 21% over the last 12 months, slightly outperforming the 19% return in the MSCI Emerging Markets Index in the period. Yet with a forward price/earnings ratio of 12.5 times, and hard growth indicators suggesting more expansion is in the works, a bigger “reflation trade” may be underway and have more room to run in China than in the U.S., where next-12-month P/Es stand at a lofty 17.7x, GDP growth came in at 2.1% in the last leg of 2017 and the Atlanta Fed’s GDPNow model for GDP growth puts U.S. first quarter 2017 growth at a lowly 1.2%.

As bottom-up stock pickers, we don’t to tend to look at broad market valuations across geographies. But as global, relative-value investors who do keep an eye on economic backdrops, it’s hard not to notice the upside potential of China’s equity market and resurgent economic growth.