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Workers remove covering from Australian iron ore at the port in Tianjin municipalityVINCENT DU/Reuters

Cam Hui at Humble Student of the Markets raises an interesting point: If investors want exposure to mining companies but are shying away from Australia, Canada looks like a natural bet.

The idea comes as a few observers take hammers to the Australian economy – most visibly, Variant Perception, whose report this week was entitled "Australia: The Unlucky Country." It seems that a housing bubble, a pricey Australian dollar and a heavy reliance upon the Chinese economy make for a bad combination these days, given all three are poised to stumble.

For anyone whose association with Australia is limited to shiraz, this doesn't mean much. But for investors who have been keeping an eye on Australia's mining sector, where shares have already fallen about 27 per cent over the past year, the impact could be big.

"Australia sounds like it may be an accident waiting to happen," Mr. Hui said. "As for the timing of a downturn, I have no idea when China's economy will hit a serious air pocket, but when it does the Australian economy is going to be toast."

He compared Australia's stock market to Canada's by looking at the relative performance of the iShares MSCI Australia ETF versus the iShares MSCI Canada ETF and found that Australia has been doing exceptionally well over the past two years. However, the Australia ETF is at the top end of a trading range with the Canada ETF and is now showing signs of turning around – that is, falling relative to Canada.

"If investors are so worried about Australia, but want to have exposure to the global sectors that it represents, there is a better way – Canada," he said. "The equity markets of both countries are structurally similar, with similar degrees of weighting in resources (though Canada is more energy heavy and Australia is more tilted towards mining).

"In short, it may be time to buy Canada and sell Australia and, for the adventurous, buy Canada and short Australia."

That said, it is not readily apparent that Canadian resource companies will perform better than Australian resource companies should China's economy head south. If the price of copper, zinc and iron ore – already under pressure with signs of overcapacity in China – deteriorates, mining companies will all suffer, regardless of where their head offices are located. Indeed, Canada's materials index, which includes fertilizer producers and gold producers, has fallen 26 per cent this year.