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Why an emerging markets panic may be justified

Despite every effort from policymakers and central bankers, the emerging markets sell-off continues – and there are more warnings that this might settle in for the long haul.

Emerging market economies are bigger and more closely linked to developed market economies than ever before and the term can seem increasingly obsolete when applied to a country like China -- the world's second biggest economy.

This could mean that when faster-growth markets sneeze, more established economies like the U.S. and Europe catch a nasty cold.

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(Read more: What happens in EM (mostly) stays there: Goldman)

"The (U.S.) economy's reliance on private final demand will be important to the extent that US exports, which have recently been strong, eventually slow in response to a strengthening dollar and weaker growth in the emerging markets," analysts at Deutsche Bank warned Thursday.

One of the key data points to watch out for will be import figures. Turkey and South Africa have both seen their currencies plunge in value against the dollar this week, despite aggressive action from their central banks, a sign that market confidence in their economies is falling.

(Read more: Are emerging markets on the brink of another crisis?)

A weaker currency in Turkey and South Africa will mean that businesses there will find it harder to afford goods and services from other countries. And in turn this will hit the order books of the world's biggest economy -- the U.S..

"The fact that currencies weakened despite policymakers responding to the sell-off opens up the potential for a new and more dangerous phase of the crisis," Neil Shearing, chief emerging markets economist at Capital Economics, told CNBC.

The U.S. Federal Reserve Open Markets Committee's decision to continue scaling down its asset purchase program, despite the effect such action has had on emerging markets in the past, suggests that it is not concerned about the potential contagion for the U.S..

(Read more: Did the Fed leave emerging markets out in the cold?)

Emerging markets are 'diverging': Pro

Turkey and South Africa's combined global gross domestic product (GDP) only amount to around a tenth of the U.S.'s. But a slowdown in more than one of the bigger BRIC (Brazil, Russia, India, and China) countries, which have tripled their share of global GDP in the past 15 years, would have a much bigger impact.

China is experiencing rising wages and slowing growth, together with increased worries about the size of its banking sector and whether that sector is in the middle of a credit bubble. Close to half of all private credit in China is up for refinancing in the next year, according to Morgan Stanley calculations. Harsher conditions for borrowing could mean further belt-tightening and slowing growth in China's demand for western goods.

But Mark Mobius, the emerging markets champion who is chairman of Templeton Emerging Markets Group, has stayed optimistic amid the current turmoil.

"Emerging markets' economic growth rates in general continue to be at least three times faster than those of developed markets; emerging markets have much greater foreign reserves than developed markets; and the debt-to-GDP ratios of emerging market countries generally remain much lower than those of developed markets," he argued.

- By CNBC's Catherine Boyle. Twitter: @cboylecnbc.

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