Cover Spillover Notes
Spillover Implications of China's Slowdown for International Trade
Author:
Patrick Blagrave
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and
Mr. Esteban Vesperoninull

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Series:
Spillover Notes
Volume/Issue:
Volume 2016: Issue 004
Language:
English
Publication Date:
27 Sep 2016
DOI:
https://doi.org/10.5089/9781475539462.062
ISBN:
9781475539462
ISSN:
2522-7890
Pages:
18
Keywords:
SN; China demand shock; final demand; China-demand shocks; growth shock; demand condition; growth slowdown; processing-trade export; China shock; Export performance; Exports; Emerging and frontier financial markets; Global; Asia and Pacific
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Using a panel vector autoregression and a novel measure of export-intensity-adjusted final demand, this note studies spillovers from China’s economic transition on export growth in 46 advanced and emerging market economies. The analysis suggests that a 1 percentage point shock to China’s final demand growth reduces the average country’s export growth by 0.1–0.2 percentage point. The impact is largest in Emerging Asia, where an export-growth-accounting exercise suggests that China’s economic transition has reduced average export growth rates by 1 percentage point since early 2014. Other countries linked to China’s manufacturing sector, as well as commodity exporters, are also significantly affected. This suggests that trading partners need to adjust to an environment of weaker external demand as China completes its transition to a more sustainable growth model.
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Cover Spillover Notes
Spillover Notes
ISSN:
2522-7890
Publisher:
International Monetary Fund
Volume 2016: Issue 004