Decoupling, the idea that emerging market economies are increasingly performing independently from economies in the western world, is a real phenomenon, HSBC Bank Australia head of global markets Tony Cripps said.
 
Critics of this theory won support during the crisis as they pointed out emerging markets had been just as badly affected, and in some cases performed worse, than developed economies.

But Cripps said this was merely a distortion due to the severity of the crisis.

"Decoupling is actually a real story," Cripps said. "It was masked somewhat by the crisis."

"We are starting to see some more of that decoupling as emerging markets start to stand on their own two feet, in terms of trade flows and domestic consumption."

Cripps made the statements yesterday at the launch of HSBC's emerging market index.

The new index is based on the purchasing managers' index (PMI) of 13 emerging countries.

It differs from existing indices, such as the MSCI Emerging Markets index, in that it includes PMIs of countries that were not previously available, Cripps said.

HSBC sees a crucial role for emerging markets in the recovery of the global economy.

Although emerging markets are not likely to replace the United States as the world's largest consumer market any time soon, there is a growing middle class, especially in Asian countries, that will drive growth.

Emerging markets currently represent a third of the world's GDP. Cripps expects this share to move to half of global GDP over the next 10 to 15 years.

"China will become the number one consuming country over the next decade," he said. "It won't be very long before China is the world's most important economy."

Australia will benefit from this, as it is more dependent on Asian economies than those in the western world.

The fact that Australia escaped a recession was not due to luck, Cripps said, but because of its ties to the region.