RealMoney

Australia, the "Lucky Country," is counting its blessings after its latest economic figures came out. Its second-quarter gross domestic product growth came in at 0.5% quarter on quarter, a basis point under expectations but meaning it has now notched up 100 recession-free quarters. A quarter of a century!

Once considered the end of the world, Australia is now making itself very much part of Asia -- or the Asia Pacific, if you will, as they extend the continent's scope a tad. 

It is also posting an impressive 3.3% annual rate of growth, the fastest in four years. That's not bad at a time when China's growth is slowing down, robbing it of the formerly fat wallets buying its biggest exports, mining and coal. It looks set to continue growth of around 3% for the next two years, according to Société Générale.

Its Lucky Country nickname is now used to describe its apparently titanium-made economy that rides out just about every crisis undented. But interestingly, it began as an insult.

The writer Donald Horne coined the phrase in a 1964 book by the same name. It stems from the opening words of the last chapter: "Australia is a lucky country, run by second-rate people who share its luck."

Unlike most industrialized nations, Australia didn't rely on "clever" methods of driving its economy, such as technology or innovation, Horne stated; instead, it relied on basic industries, such as extracting natural resources. In other words, digging big holes in the ground.

It is attempting to shake off that perception, with mixed success. But its moves to strengthen ties into Asia, and particularly with China, should be applauded.

Two-time former Prime Minister Kevin Rudd speaks competent Mandarin, having majored in Chinese language and history as an undergrad and following that up with a stint in Taiwan. He had two years of very high popularity ratings amid a big push from the former diplomat to set Australia solidly in the "Asia Pacific century," as he dubbed it. 

Sadly, to my mind, he succumbed to a leadership challenge in his third year in office from within his Labour Party, moving on to become foreign minister. He then had a rather bizarre three-month second stint as PM in 2013 before losing an election he himself had called. Australian politics is never boring.

It's true that Australia has been an excellent proxy for access to the Chinese economy and all that entails. It's popular because China's equity markets are so famously closed -- although the door is opening -- and because investors escape the hassle of trying to move in and out of the Chinese yuan. Beijing of course keeps just as tight a grip on its currency as its stocks.

So if you're scared about holding the synthetic exchange traded funds that mimic the China market, it's not a bad idea to take a look at a product tracking the benchmark S&P/ASX 200 index, which covers 80% of the Aussie market. The iShares MSCI Australia ETF (EWA) is the heavyweight, 10 times the size of its nearest neighbor.

Markets didn't move much in reaction to the GDP, rising 0.2%. After taking a 51% hammering between October 2007 and February 2009, it's now showing average annual returns of 5.3% over the last five years. Not a tech stock, for sure, but slow and steady.

The four-largest ASX components are NOT metals companies, they're all banks. That's Commonwealth Bank (CMWAY) , Westpac Banking (WBK) , ANZ Banking (ANZBY) and National Australia Bank (NABZY) , for those who are counting. The banks sure are!

That puts a drag at a time that Aussie rates are at an all-time low. The good news on that front in the latest GDP figures is that growth appears to be ticking along, and economists say that has relieved any pressure on the central Reserve Bank of Australia to cut rates again anytime soon.

You have to look to No. 5 BHP Billiton (BHP) before getting to a mining stock. Trade actually picked up 2.3% in the latest quarter, breaking a stretch of nine consecutive quarters of decline. Nomura notes that's thanks to a pickup in commodity prices and a decline in import prices. Ultimately that is feeding into a modest rise in living standards, part of the pressure valve for the RBA.

If you want to cherry pick stocks, Telstra (TLSYY) is the main phone company and CSL (CSLLY) its largest health-care provider. Agricultural conglomerate Wesfarmers (WFAFY)  -- now Australia's largest company by employment and revenue -- and supermarket chain Woolworths AU:WOW provide exposure to consumer staples.

It has been small-cap stocks that have been the big performers, though. The IQ Australia Small Cap ETF (KROO) is up 23.3% year-to-date, the top-performing U.S.-listed Aussie ETF. Those in search of yield can consider the WisdomTree Australia Dividend Fund (AUSE) , coming in No. 2 at 20.2% in 2016.

My Sydney-based sister will vouch for the very high property prices in the country's biggest city. Prices there rank behind only my home town, Hong Kong, as being the least-affordable in the world, according to Demographia, which compares average housing prices to wages. Vancouver comes third on that dubious list.

So while the Aussies have been taking their coal to China, Chinese developers are now taking their capital to Australian condos. Overseas buyers can only own new property Down Under, so companies such as Greenland, Country Garden and Shimao Property are buying up unused or underused lots and building apartment towers, presumably looking to sell them back home. Blackstone (BX) made its first core-plus investment in Asia in a A$240 million deal for a Sydney office tower early last year.

Australia's luck should hold -- and while the Chinese buyers cause quite considerable muttering about selling the country out and overseas, the link with Asia is only getting stronger.