China will have a bigger influence than the US or Europe over the economies of developing nations as the world’s biggest exporter increases its contribution to global growth, according to HSBC Holdings.
“We are moving away from a US- or Europe-led world to a world led by China,” Stephen King, HSBC’s chief economist, wrote in an Emerging Markets Index report published yesterday. “China will make its biggest-ever contribution to global growth in 2014,” King said, in what he termed a “great rotation”.
China’s economic growth would accelerate to 8.6 percent this year, from 7.8 percent in 2012, King said, a growth rate that will benefit neighbouring states. China’s projected expansion compares with a 5.4 percent growth forecast for the emerging world as a whole.
Exports to China account for 12 percent of South Korea’s gross domestic product, up from 3.5 percent in 2000. Malaysia, Singapore, Australia, Chile, Kazakhstan and Saudi Arabia have also increased their exports to China.
While China’s expected growth rate this year was not as high as the 10 percent or 11 percent levels seen in the past, “China is now a much larger economy and because of that, Chinese contribution to global growth is much bigger”, said Murat Ulgen, HSBC’s chief economist for central and eastern Europe and sub-Saharan Africa. – Bloomberg