DAVOS, Switzerland, Feb. 1 -- China is now a big economy whose economic policies will draw Western attention instead of being just Asia's local operation, said Stephen King, chief economist of the Hong Kong-based HSBC bank.

China has become a source of growth in the global economy, and Western economies are quite concerned, especially after the economic crisis, about whether the Chinese central bank will tighten monetary policies, King told Xinhua on the sidelines of the World Economic Forum (WEF) annual meeting.

"Ten years ago, this would never have happened," he said.

According to King, China, whose economy grows about three times as fast as the U.S. economy, contributes to global growth almost as much as the United States.

Emerging markets led by China performed "extremely well" for the past years, and have been leading the global recovery, King said.

In the past, everyone had to wait for the United States to recover first, but there is a danger that the United States could become more protectionist as it is struggling to recover, King said.

U.S. President Barack Obama's move to limit the size of banks harbored a danger of becoming a little bit "too domesticated and too nationalistic."

"Debate of big or small banks does not deal with the actual factors that have contributed to the difficulties that each bank has faced, such as funding model, dependency on securitization," King said.

U.S. banks need to go through their diversity, business models as well as specific assets classes, King said, adding that it was a collapse in confidence that caused banks to fail in different ways.

As positive signs of economic recovery show up, markets begin to fear that they would collapse if governments withdraw their supports, King said.

Meanwhile, the economic crisis has created some long-term problems for the West, especially for countries with a large debt, he said.

"Governments in the West are not really sure what to do with these debts and we will be in a world of higher taxes and cutbacks in public spending," he said.

It is believed that the worst of the financial crisis has retreated, but, according to King, the danger has moved from financial institutions and households to governments and taxpayers.

"Clearly financial markets are much more nervous about government debt now than what was the case a few months back," he said.

In the past, developed countries like the United States and Britain used to choose export over consumption and government spending, King said.

"The quick way of doing that is through currency devaluation," though the danger with currency devaluation is that it makes life easy for exporters and they become lazy, he added.

According to King, the Western model has moved closer to that of China after the economic turmoil.

"You need to have a proper sense of a relationship between actors on the market and policy makers, regulators and governments to get that balance right," he said.