The United States, Japan and Europe are set to take the back seat to China's economy, which will take the centre stage of the "new world", according to HSBC. The "old world's" outlook remained bearish, said Stephen King, HSBC's chief economist, adding that debt and deleveraging had slowed growth in the US and Europe. The failure of countries in the "old world" to exploit the opportunities presented by China's growth is one of the key reasons for their demise, King said. In an outlook report, HSBC notes that countries such as South Korea, Malaysia and Singapore have all experienced big increases in their export exposure to China. Commodities producers, Australia, Chile and Saudi Arabia have also benefited from China, leaving countries such as France, Canada, Italy and Britain trailing in their wake. The report forecast US gross domestic product growth to drop to 1.7 per cent this year from the 2.2 per cent forecast for last year. Europe is expected to improve but will still see negative growth. Interestingly, HSBC has chosen to take a contrarian stance on Japan's quantitative easing policies. Japan's GDP growth is forecast at 0.2 per cent, against 1.9 per cent predicted for last year. David Bloom, the bank's global head of foreign exchange strategy, said: "Japan won't be successful in their aggressive policies to revive their economy. Instead of weakening, the yen will strengthen." King said quantitative easing policies did not work in Britain, with the pound strengthening. "Bond buying by the Japanese government will not work," he said. "Britain and the US in the past have demonstrated that it won't. Japan has to make a radical move to make a change." Frederic Neumann, a managing director and co-head of Asian economic research, said historically, the Japanese government had not been able to spend all that they planned. Neumann also questioned Tokyo's 2 per cent inflation target, saying a 1 per cent rate was a more realistic number to expect. Despite bearish forecasts for the US, Europe and Japan, Hong Kong is expected to be back on track this year. HSBC said the city's GDP growth would jump to 4.7 per cent from last year's 1.7 per cent. "[Mainland] China's growth and Hong Kong's record low interest rates place Hong Kong in a good position. Property prices will continue to rise," Neumann said. On Hong Kong's equity market, Gary Evans, HSBC's global head of equity strategy, recommended A shares over H shares. "H shares have outperformed. A shares will have to play catch-up. Therefore, A shares will be at a discount."