The US has the biggest economy in the world and it is traditionally perceived that other countries rely on it rather than the other way round.
However, there is one country that has made an explosive entry into the group of major global economies and which is having a significant impact on the US economy and equity market. That country is China.
The rapid industrialisation occurring in China is having phenomenal ramifications throughout the world and is a significant driver of the global economy – its GDP is growing at a rate of 9 per cent a year.
But while there is undoubtedly scope for growth to continue and we believe the long-term prospects for China are good, we should be prepared for a bumpy ride along the way.
We could well see some slowdown in China's rate of growth near term and we are taking care with how we play the China story.
The Chinese stockmarket is relatively small and firms are looking elsewhere to be listed – most notably Hong Kong and the US.
A growing number of Chinese companies are being floated on the New York Stock Exchange but so far we have not invested in these companies as we feel they are quite risky.
China has no major brands or technology of its own and we do not expect to see any Chinese multinationals emerging in the near future.
However, we recognise that it would be irresponsible to avoid exposure to this phenomenon altogether and there are other ways to benefit from it.
For instance, China's appetite for commodities such as steel, nickel, copper and aluminium is staggering. Despite the country's size, it has few raw materials of its own, yet base metals are essential to build the infrastructure for industrialisation.
China is importing one-third of the world's coal, cement and steel output and last year it replaced Japan as the world's second-biggest oil importer – despite the fact that oil is one of the few natural resources of which China has an extensive domestic supply.
The demand for these commodities has sent prices soaring, as witnessed by the GSCI Industrial Metals Index, which surged by about 40 per cent last year.
There are several ways in which we should be able to ride the wave and benefit from the growth in China. One is through commodity-based stocks such as US Steel and Steel Dynamics. Another is through exposure to shipping stocks.
Tanker rates have gone sky-high as companies clamour to ship their raw materials to Asia.
US shipping companies are not just benefiting from demand for raw materials. China is also a major exporter and more of the US's imports come from China than anywhere else. Alexander & Baldwin, the biggest bulk carrier between Hawaii and the Far East, is one of our most significant holdings.
As part of the industrialisation process, a mass urban migration is taking place as people move from the countryside to seek jobs in the new factories.
The sheer number of people available to work – China's population is over 1.2 billion – means that labour costs are significantly lower than in many other countries. Many of the low-cost goods we see on shop shelves are produced in China. This is bad news for other countries as more companies transfer production to Asia.
Many European economies are feeling the pinch because of the weakness of the dollar. What is more, not only are the values of sterling and the euro high, but China's currency, the renminbi, is pegged to the dollar, so, like the greenback, it too is very weak.
We expect the renminbi to be re-pegged at a higher level, redressing this imbalance to some extent, but at present European exports appear expensive compared with Chinese goods.
The US is importing a huge amount of goods from China, which means that investors can share in China's improving fortunes through retailers such as WalMart. Some analysts estimate that as many as half the ships leaving China, at the moment, are bound for WalMart. There are no hard numbers to prove this but the concept is thought-provoking.
There are other themes for investors in the US to exploit, not least the positive impact of the weak dollar on exporters, but we believe that a focus on China's expansion should continue to deliver strong returns for a considerable time to come.