Asia’s emerging economies are poised to record sustained growth over the next few decades because of blossoming regional trade links and vibrant domestic markets, says HSBC in its latest report.

“Emerging economies are driven primarily by domestic demand and exports that feed themselves into self-sustaining pictures. The acceleration of output in emerging economies in the last quarter of last year indicated decoupling from Western economies,” says Frederic Neumann, co-head of Asian research.

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We remain confident of emerging market growth even though European markets might face some head wind," Mr Neumann said (HSBC)

The statement was backed by the quarterly HSBC Emerging Markets Index (EMI), which increased to 55.7 in the last quarter of 2010 from 54.2 in the previous quarter when the indicator was unchanged.

The reading reflects a significant increase from the third quarter of 2010 and a recovery from the beginning of the year when the indicator declined.

The EMI, which is calculated from a survey of 6,000 firms in 16 emerging economies, also showed that the manufacturing sector for exports accelerated while the services sector declined in those economies. The fact that emerging markets’ exports were higher than pre-crisis levels while imports of the Western world had not recovered showed that demand was from emerging markets.

“The output in emerging economies was comfortably higher than pre-crisis, which is not the case among Western markets. We remain confident of emerging market growth even though European markets might face some head wind,” Mr Neumann said.

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