by Staff Writers
Singapore (AFP) Jan 15, 2013
Western nations have failed to capitalise on China's economic rise as they struggle with their own problems, leaving others to benefit from the Asian giant's insatiable demand, HSBC said Tuesday.
"The world economy is increasingly led by China. Those nations raising their China exposure have outperformed. Western nations, faced with internal discord, have failed to grab the opportunity," the bank said.
"We are rapidly moving away from an 'old world' dominated by Europe, the US and Japan to a 'new world' led by China," it said in a report entitled "The Great Rotation".
Among the beneficiaries of the global shift are countries located close to China and far-flung exporters that supply the Asian giant's demand for commodities, the report noted.
South Korea's exports to China currently account for 12 percent of its gross domestic product (GDP), up from 3.5 percent in 2000, HSBC said.
Malaysia and Singapore are also key industrial exporters to China while commodities producers like Australia, Chile, Kazakhstan and Saudi Arabia "have also shared in the spoils," the bank added.
"And in demonstrating China's ever-increasing connections with Africa, Angola is now China's 14th most important source of imports ahead of India, France, Canada, Italy and Britain," it said.
Western countries, in contrast, have failed to exploit Chinese demand, it said.
US exports to China account for a mere 0.7 percent of US GDP, with Canada, France and Italy "more or less" at the same level, HSBC said.
Britain's exports to China are even less significant at 0.4 percent of British GDP, it said.
While Germany has expanded its trade ties with China, this was overshadowed by a bigger increase in its dependence on the rest of Europe, HSBC noted.
This is "one reason why, despite its competitive advantages, Germany found itself succumbing in the second half of 2012 to a crisis which had already engulfed other parts of the eurozone," the bank said.
HSBC forecasts China's economy to grow 8.6 percent this year, up from an estimated 7.8 percent expansion in 2012.
The US and Japanese economies are expected to grow 1.7 percent and 0.2 percent respectively next year while the eurozone is likely to contract 0.2 percent, the bank said.
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