Riddle me this: When is it good news when an analyst slashes his price target for a stock by 55%? Answer: When that “reduced” target price still represents a 59% gain. That’s precisely the scenario facing Companhia Vale do Rio Doce (ADR: RIO), the world’s biggest iron-ore producer.

Data released this week show that China is still flying in the face the global economic slowdown. Retail sales there soared 21.6% year on year  in May, despite a devastating earthquake and stock market slump. Exports for the same month surged 28.1%, even as demand in major western markets faltered.

“The export statistics are serving as evidence of an economic theory known as ‘decoupling,’”, writes Jason Simpkins in Money Morning, “in which emerging markets in Asia and Europe have developed enough market place muscle to no longer be dependent on the U.S. economy for growth”.