China's influence over Asia is significant and growing. But it is by no means the only story in Asia. Perhaps due to China's stellar rise, it is easy to overlook the substantial sway the US economy still holds over much of the region.
Concerns over slower growth trends in China, along with the spectre of the US Federal Reserve's tapering of quantitative easing, have spooked global financial markets in recent months. On the positive side, though, Beijing is sticking close to its strategy of ensuring balanced growth, and the US economy is recovering.
China's slowdown will probably result in some moderation in Asia's near-term growth. But any short-term sacrifice should benefit both China and the rest of the region in the longer term. Such an outcome would be much more palatable than unabated overinvestment in China.
And let's not neglect the mitigating effect of the US recovery. The US is still the world's largest economy, and almost twice the size of China's in terms of nominal gross domestic output. Given this, it is timely to assess the influence of both China and the US in Asia.
In a recent study, we examined the linkages through overall growth and channels of trade, tourism and foreign direct investment. We found that northeast Asia and Singapore are more exposed to China than to the US, while India, the Philippines and Indonesia lie at the other end of the spectrum.
In the past five years, China's importance to Asia has grown relative to the US. Over a longer period, though, Asia is more exposed to US headline growth than to China's. It is vital that any slowdown in China be gradual so economies can adjust without suffering too much volatility. The trade route underlines this point.
Asia is a highly open region. Of the 10 economies we studied in the region, six have trade exceeding their total domestic economic output. Trade is a channel where China shows its dominance; all 10 economies in our study - notably Hong Kong, Australia, Taiwan and South Korea - have increased their exports to China relative to the US since 2005.
As of 2012, only India and the Philippines sent more goods to the US than to China. However, this does not take into account the fact that a significant portion of the region's exports are re-exported by China to the US and other Western markets.
Tourism also links Asian economies and influences regional growth. Given its close proximity, China is the dominant source of international tourists for most of Asia, with the exception of India and the Philippines. All 10 economies have seen a widening gap between the number of Chinese and US tourist arrivals since 2005. And Chinese tourists spend as much as US tourists (on a per capita basis) in some places.
Foreign direct investment is another important channel through which the US and China influence growth in Asia. With the exception of Hong Kong, the US remains the dominant investor in Asia.
We expect US growth to accelerate to 2.7 per cent next year from 1.6 per cent this year, and China's growth to ease to 7.2 per cent from 7.5 per cent. Our study concluded that the net growth impact of a mild slowdown in China and a recovery in the US will be positive for Malaysia, Taiwan, Hong Kong, Singapore and Korea, all else being equal.
The importance of China to the health of the global, and Asian, economies is undeniable. But as long as China's much-needed rebalancing is moderate and well calibrated, and US growth continues to improve, Asia will stand to gain.
Edward Lee is regional head of research for Southeast Asia at Standard Chartered Bank