As China's imports play a predominant role in trade of non-fuel mining and non-food soft commodities, we will look at these two categories to gauge which countries would be more vulnerable after China's imports of those products slow or even decline.

In 2011, Australia was the world's largest exporter of non-fuel mining products. With export value of US$ 91bn, Australia's non-fuel mining product exports were 1.6x that of the US and 1.8x that of Brazil, the second and third largest exporters.

In terms of dependence on non-fuel mining exports (defined as exports value of those products as percentage of GDP), Chile, Peru, South Africa and Australia are the four countries with more than 5% dependence on non-fuel mining exports (See Figure 18).

Their dependence was 19.9%, 10.3%, 7.4% and 6.1% respectively. In contrast, the dependence of the US and Brazil was only 0.4% and 2% respectively. In other words, Chile, Peru, South Africa and Australia are more vulnerable than Brazil if non-fuel mining trade, which is centred on China, corrects.

As for non-food soft commodities exports, the US ranked among the largest exporters in 2011 with its exports being 1.7x and 2.2x that of Canada and the Netherlands the second and the third-largest exporters, respectively.

But dependence of non-food soft commodities is much more moderate compared with non-fuel mining among major exporters. This is because non-food soft commodities trade is much smaller than non-fuel mining trade. In 2011, non-fuel mining trade was 2.2x of non-food soft commodities trade. In 2011, Thailand ranked the first in terms of dependence on non-food soft commodities (4.7% of GDP) (See Figure 19).

Eoin Treacy's view China's commodity demand growth is likely to moderate as the economy evolves from an infrastructure & lost cost manufacturing focus to a greater consumption and services orientation. However, since this represents a corresponding rise in living standards, which is highly correlated with rising per capita consumption of commodities, it is arguable whether a future average growth rate of 6-8% will result in an outright decline in commodity demand.

Additionally, the slowdown in European and US economic activity has had a knock-on effect on China which has exacerbated the impact on commodity prices. As the fiscal cliff continues to exert a negative influence on investor sentiment there is additional potential for commodity prices to remain volatile. However, they should benefit once global economic growth returns to a more sound footing.

With China's political transition occurring as planned, the fundamental value currently evident in the stock market should attract investor interest over the next few months and this should act as a tailwind for China dependent markets.

The Continuous Commodity Index encountered resistance near 600 in September following an impressive rally and continues to unwind the short-term overbought condition. A clear upward dynamic will be required to check potential for a further test of underlying trading.

The dependence of countries such as Australia, Chile, South Africa and Peru not only on China's commodity demand but growth in that demand makes them sensitive to changes in the pattern of consumption of raw materials.