If America sneezes (economically), does Asia still catch pneumonia?

China’s phenomenal growth has prompted talk over the last several years about “decoupling”—that Asia is more prepared to go it alone if the US economy slows. Now, with a growing number of economists predicting that the fabled American consumer is tired of laboring under his strapping debt load and a hard landing is around the corner for the US economy, can Asia go it alone?

Probably not. China’s economy is still only about a third the size of the US’s. Asian exports to the US amounted to nearly 10 percent of the region’s GDP in 2005 and, according to Morgan Stanley Research economist Andy Xie, contributed as much as 15 to 20 percent of regional growth outside Japan. Certainly China itself is up to its ears in exports to both the US and the EU, while striving largely vainly to push its own consumers, among the world’s most assiduous savers, to take their money out of the bank or the mattress and spend it.

The US consumer still drives global liquidity through the US current account deficit. When the current account deficit is large, as it is now, dollar supply in emerging economies is plentiful and their real interest rates tend to stay low, sparking domestic demand. If American imports begin to shrink, the effect isn’t just on the factories pushing goods to the US. It also means that real effective interest rates will climb in the exporting countries. So reach for the box of tissues, Asia.