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Spillovers from China onto Sub-Saharan Africa: Insights from the Flexible System of Global Models (FSGM)

Author

Listed:
  • Mr. Derek Anderson
  • Mr. Jorge I Canales Kriljenko
  • Mr. Paulo Drummond
  • Pedro Espaillat
  • Mr. Dirk V Muir

Abstract

What is the impact of economic spillovers from China on sub-Saharan Africa (SSA)? This is an increasingly important question because of China’s growing economic role as a partner of SSA countriesfor both trade and the buildup of infrastructure in the region. The impact of spillovers from China has been an open question because of the challenge to use an internally consistent framework with solid economic foundations that accounts for both the direct impact China may have on individual countries in SSA through a variety of channels (trade, investment, financial) as well as the impact on the region through the global economy (economic activity and commodity prices). This paper explores those channels of transmission and provides illustrative order of magnitude for the short- and medium-term economic impact by using AFRMOD, a module of the Flexible System of Global Models (FSGM), a multicountry general equilibrium model developed at the IMF. Three alternative scenarios are considered: first, lower potential output in China that is originally misperceived as a temporary cyclical slowdown; second, structural reforms in China that aim to increase potential output; and third, a relocation of low-end manufacturing to sub-Saharan Africa.

Suggested Citation

  • Mr. Derek Anderson & Mr. Jorge I Canales Kriljenko & Mr. Paulo Drummond & Pedro Espaillat & Mr. Dirk V Muir, 2015. "Spillovers from China onto Sub-Saharan Africa: Insights from the Flexible System of Global Models (FSGM)," IMF Working Papers 2015/221, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2015/221
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    Citations

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    Cited by:

    1. Necla Ilter Kucukcolak, 2019. "Evaluation of Commodity Market Experiences: More Than a Design Issue," International Journal of Economics and Financial Issues, Econjournals, vol. 9(1), pages 66-78.
    2. Lakatos,Csilla & Maliszewska,Maryla & Osorio-Rodarte,Israel & Go,Delfin Sia, 2016. "China's slowdown and rebalancing: potential growth and poverty impacts on Sub-Saharan Africa," Policy Research Working Paper Series 7666, The World Bank.
    3. Blagrave, Patrick & Vesperoni, Esteban, 2018. "The implications of China’s slowdown for international trade," Journal of Asian Economics, Elsevier, vol. 56(C), pages 36-47.
    4. Cashin, Paul & Mohaddes, Kamiar & Raissi, Mehdi, 2017. "China's slowdown and global financial market volatility: Is world growth losing out?," Emerging Markets Review, Elsevier, vol. 31(C), pages 164-175.
    5. Zhai, Fan & Morgan, Peter, 2016. "Impact of the People’s Republic of China’s Growth Slowdown on Emerging Asia: A General Equilibrium Analysis," ADBI Working Papers 560, Asian Development Bank Institute.
    6. Allan Dizioli & Mr. Jaime Guajardo & Mr. Vladimir Klyuev & Rui Mano & Mr. Mehdi Raissi, 2016. "Spillovers from China’s Growth Slowdown and Rebalancing to the ASEAN-5 Economies," IMF Working Papers 2016/170, International Monetary Fund.
    7. Huang, Jianbai & Dong, Xuesong & Zhang, Hongwei & Liu, Jia & Gao, Wang, 2022. "Dynamic and frequency-domain spillover among within and cross-country policy uncertainty, crude oil and gold market: Evidence from US and China," Resources Policy, Elsevier, vol. 78(C).
    8. Jochen Andritzky & Bernhard Kassner & Wolf Heinrich Reuter, 2019. "Propagation of changes in demand through international trade: A case study of China," The World Economy, Wiley Blackwell, vol. 42(4), pages 1259-1285, April.
    9. Mr. Alexei P Kireyev & Andrei Leonidov, 2016. "China’s Imports Slowdown: Spillovers, Spillins, and Spillbacks," IMF Working Papers 2016/051, International Monetary Fund.
    10. Mullings, Robert & Mahabir, Aruneema, 2018. "Growth by Destination: The Role of Trade in Africa’s Recent Growth Episode," World Development, Elsevier, vol. 102(C), pages 243-261.
    11. J. Alexander Nuetah & Xian Xin, 2019. "Has China’s Investment Pattern in Sub-Saharan Africa Been Driven by Natural Resource Quest?," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 11(3), pages 215-231, September.
    12. Fan Zhai & Peter Morgan, 2016. "Impact of the People’s Republic of China’s Growth Slowdown on Emerging Asia: A General Equilibrium Analysis," Working Papers id:10509, eSocialSciences.
    13. Pahl, Stefan & Brandi, Clara & Schwab, Jakob & Stender, Frederik, 2020. "Cling together, swing together: The contagious effects of COVID-19 on developing countries through global value chains," IDOS Discussion Papers 21/2020, German Institute of Development and Sustainability (IDOS).
    14. Apurva Sanghi & Andrew Burns & Calvin Djiofack & Dinar Prihardini & Jagath Dissanayake & Claire Hollweg, 2017. "A Rebalancing China and Resurging India," World Bank Publications - Books, The World Bank Group, number 28422, December.
    15. Michael Mitchell Omoruyi, Ehizuelen, 2016. "Can Cheetah Beat Tiger? A Comparative Analysis of Chinese Industrial Competitiveness with Sub-Saharan African Countries," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 39(3-4), pages 41-76, sept-dec.

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