China set to make biggest ever contribution to global growth in 2014
A new report predicts that China is set to make its "biggest every contribution to global growth in 2014" as the Middle Kingdom replaces the United States and Europe as the driving force behind the world economy.
According to HSBC's Emerging Market Index for the final quarter of 2012, the Chinese economy will see significant growth improvement this year, rising to 8.6% from 7.8% in 2012, and far ahead of the 5.4% growth rate anticipated for emerging markets overall.
HSBC's Chief Global Economist Steven King points out that although China's growth rate has fallen well below the double digit levels which characterized its rapid ascent throughout the past decade, the country's increased economic size mean that if anything its ongoing contribution to global growth has increased.
This view is vindicated by the increased exposure to China of export industries throughout the world, and in the Asia-Pacific especially, during the past five years.
A full 28% of Australia's exports are destined for China, enabling the Middle Kingdom to set the price of Australian commodities for other overseas purchasers.
Other Asian nations such as Malaysia, Singapore and South Korea have also seen their exports to China rise sharply of late, as have more distant countries such as Chile, Kazakhstan, Saudi Arabia and Angola.
King claims that China's swift ascendance has created two primary tiers in the global economy – that of the "old world" of North America and Europe which is still in the process of deleveraging, and a "structurally dynamic" world of new emerging markets dominated by China.