(EnergyAsia, January 16 2013, Wednesday) — Mired in its worst economic downturn since the Great Depression of 1929, the West strangely has failed to take advantage of the opportunities presented by the rapid growth in the emerging economies led by China.

In its latest Emerging Markets Index report, HSBC chief economist Stephen King observed that the US exports a mere 0.7% of its GDP to China, with Canada, France and Italy “more or less the same.”

He wrote: “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 UK’s exposure to China is lamentable: exports to China account for only 0.4% of UK GDP, not much more than a rounding error. Japan and Germany do a lot better yet their higher exposures can’t hide underlying weaknesses. In Japan’s case, its uneasy political relationship with its mainland rival – exemplified in an unresolved island dispute – led to a collapse in exports from Japan to China in the second half of 2012.

“Meanwhile, Germany’s heightened trade relationship with China has been absolutely swamped by an even bigger increase in its dependency on the rest of Europe, 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.”

Following a pick-up in the fourth quarter, the bank has raised its outlook for Chinese GDP growth to 8.6% in 2013 to follow on an estimated 7.8% expansion last year.

For the emerging world as a whole, HSBC expects growth of 5.4% in 2013, up from 4.8% in 2012.

Taking a macro view, HSBC described China as being “pivotal” to global prospects as it is now a much bigger economy than it was before the global economic meltdown began in 2008.

Thus, while its own growth rate may have slowed, China’s contribution to global growth is on the rise.

As a result of what HSBC calls China’s “enhanced gravitational pull”, the bank recommends viewing the world economy as an “old world” story focused on the ongoing deleveraging in Europe and the US and a “new world” story focused on the structural dynamism of the emerging world and, in particular, China.

While the world is rotating away from a US- or Europe-led world to a world led by China, the benefits have accrued mostly to those markets either geographically close to China or important in satisfying China’s insatiable demand for commodities. Many of them are emerging economies.

HSBC found a host of smaller emerging economies along with Australia benefitting from China’s rise as shown by rapid increase in exports to China as a share of their GDP since the beginning of the 21st century.

South Korea’s exports to China has grown from 3.5% to 12% of its GDP between 2000 and 2012, while Malaysia and Singapore have experienced big increases in their export exposure to China. Commodity producers like Australia, Chile, Kazakhstan and Saudi Arabia have also shared in the spoils.

Angola is now China’s 14th most important source of imports, ahead of France, Canada, Italy and the UK.

Interestingly too, HSBC points out that India is also behind Angola: the lack of trade between India and China must count as one of the great missed opportunities of recent years.