The World Bank estimates that by 2000 China is likely to absorb about 50 per cent of foreign direct investment flowing to developing countries.

This is not an unrealistic estimate, given the record of the past two years.

Last year China attracted about 40 per cent of foreign direct investment going to the developing world, up from about 33 per cent in 1992.

These exceptionally strong inflows were due to the euphoria created by paramount leader Deng Xiaoping's whirlwind trip to the southern provinces two years ago.

But the World Bank concludes: 'Discounting today's enthusiasm, foreign direct investment inflows to China can still be expected to double between 1993 and 2000.' No wonder Ashwin Kongsiri, head of Thailand's Industrial Finance Corp, recently suggested that China was in danger of becoming a 'great black hole' in Asia, siphoning off funds, expertise and manpower.

No country can escape the implications of China's growth. But how a country views the mainland's rise depends largely on how it is affected by, and responds to, China's economic growth.

Singapore's Senior Minister Lee Kuan Yew summed it up recently when he said that in 10 years' China would be a behemoth 10 times bigger than Japan, and would dominate Asia.

'That changes the whole equation,' he said, adding that China's growth would add to Asia's growth.

Indeed, countries competing for funds and export markets must respond constructively to the challenge, if only to secure a place on the world economic map.

Nothing illustrates China's awakening more poignantly than its success on the export front.

In another report, the World Bank says that the country's emergence as a major trading power has created considerable competitive pressure for countries relying on cheap labour for exports.

Yet it has also benefitted high-income economies, including the newly industrialising economies of East Asia, which manufacture the capital goods the giant needs to build up its infrastructure.

Despite the rapid growth in per capita income, the size and under-development of many provinces will mean that the competitive pressure will continue well into the next century.

The report, Global Economic Prospects and the Developing Countries, points out that as China adopts market reforms, the structure of its exports becomes decidedly more labour-intensive, moving the country nearer to a comparative advantage.

Although only a rough guide, its index of revealed comparative advantage correlates significantly with that of four other developing countries - Egypt, India, Indonesia and Turkey.

Almost 80 per cent of China's exports come from 11 coastal provinces, which account for 40 per cent of the total population.

Differences in per capita income are large. For example, at the projected national average income growth rate, it would take 20 years for the western provinces of China to achieve the per capita income of Shanghai today.

Because the population of the lagging regions is much larger than that of the leading provinces, and because the lagging regions are likely to increase their share of China's exports over time, it is possible that the labour intensity of its exports will continue to rise for many years.

The report says there is evidence that China's export growth has displaced other East Asian economies at higher stages of development such as Hong Kong, South Korea and Taiwan.

To the extent that the labour markets in the coastal and inland regions are segmented, a dual pattern of development may result.

In that scenario, the coastal regions may increasingly compete with the newly industrialising economies of East Asia.

Commodity-exporting countries will not necessarily benefit from China's import growth.

Although imports of oil and iron ore have grown rapidly, the share of primary products in China's imports has halved in value since 1980, and shrunk by 25 per cent in volume.

China appears to have become more self-sufficient in food, non-food crude materials, and non-ferrous metals.

Its economic expansion has been accompanied by more effective exploitation of its natural resources, especially in agriculture, the sector which benefitted first from the market reforms which began in 1978.

So it appears that although the emergence of Japan since World War II has tended to move the terms of trade in favour of commodity exporters, the emergence of China will tend to cause a shift in favour of skill and technology-intensive manufactured goods.

The biggest immediate beneficiaries from China's emergence in world markets are likely to be high-income countries, arguably including the newly industrialising economies of East Asia.

Those countries are the largest importers of labour-intensive manufactured goods and the leading exporters of sophisticated capital goods and high-quality consumer goods that will constitute the bulk of China's import needs.

The recent exploratory probes by multinational companies into investment opportunities in China reinforces this conclusion.

Indirectly, the acceleration in income and world trade implied by China's rise should benefit all countries.

But its export boom should be seen in perspective.

China holds a significant share of imports by industrial countries in only a few categories: clothing, footwear, toys, sporting goods and telecommunications equipment.