Western Powers in Decline, China To Rule: Economist

Western powers are in decline and China will end up ruling the world economically, Stephen D. King, chief global economist at HSBC told CNBC Monday.

"Western prosperity is slowing eroding," said King. "The U.S. is increasingly reliant on China's deep pockets (to pay its debt with China buying U.S. Treasurys) and China will end up dominating the world when it comes to economics."

King also said that the euro crisis will turn into a crisis for the U.S. dollar.

"It comes down to the U.S. deficits," King added. "The U.S is behaving like the debtor nationsof the Mediterranean (Greece, Italy). China and other countries are asking themselves whether American taxpayers will pay their debt."

King said that other countries are watching closely what the U.S does in regards to the dollar.

"One thing the U.S. could do to get out of this (debt) problem would be to devalue the dollar to help its economy but that could lead to a major crisis for the Chinese and other countries," said King.

King went on to say that emerging markets have so far avoided a major debt legacy, unlike Europe and the U.S. He said that even with some growth in the troubled economies, it won't completely erase debts—which he says will remain large for years.

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Disclosure information was not available for King.