Emerging economies are gradually reducing their dependence on developed economies.

Observers say intra-regional trade between Asian countries will increase as China becomes a more crucial market.

Early-stage economies will benefit particularly as China's labour market moves into higher productivity roles.

Asian emerging economies will come to rely less on developed markets such as the US and Europe as the Chinese economy takes centre stage in the region.

NUS Business School MAS term professor Michael Spence said: "The aggregate demand that the emerging economies are satisfying, a good chunk of the dependence on advanced countries is steadily declining".

Observers say they expect intra-regional trade among Asian emerging economies to rise.

The world's second largest economy is driving the change as it transforms the global labour landscape in areas of services and manufacturing.

As China moves up the scale of economic development, it is starting to shed its status as a low-wage employer for low cost manufacturing services which had formed the basis of its economy since it embraced capitalism.

With its labour force shifting to roles that require value-addedness in terms of higher productivity skills and knowledge, this creates opportunities for less developed or frontier markets economies to fill the gap.

NUS Business School's professor Spence said: "China has dominated low-cost manufacturing for the last 20 years and if this exit occurs as I think it almost inevitably will, then a whole bunch of economies who thought they couldn't compete with China won't have to anymore.

"China is moving away from the extreme, the labour intensive things. What it will do is create enormous amounts of space for countries that are now at the earlier stages of growth".

Observers say that less developed countries such Bangladesh, Vietnam and Cambodia may benefit economically as low value-added production begins to shift away from the mainland.

channelnewsasia.com