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Global impact of a slowdown in China

Author

Listed:
  • Xu Bing
  • Moritz Roth
  • Daniel Santabárbara

Abstract

Given its systemic importance, a sharp and sustained economic slowdown in China affects the world economy, not only on account of its share of global GDP, but also because of its links with other economies through trade, the commodities markets and, on a more incipient level, the global financial system. Developments in China also have indirect effects on global uncertainty and confidence. This article presents various simulations of the negative impact that a sharper slowdown in the Chinese economy than expected by the main analysts would have on the global economy and, especially, on the euro area. Specifically, a further slowdown in annual growth of 1 pp in China would give rise to a decline in global growth of 0.4 pp in a year, with particularly marked effects on commodities producers and on the Asian economies.

Suggested Citation

  • Xu Bing & Moritz Roth & Daniel Santabárbara, 2019. "Global impact of a slowdown in China," Economic Bulletin, Banco de España, issue DEC, pages 1-11.
  • Handle: RePEc:bde:journl:y:2019:i:12:d:aa:n:37
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    References listed on IDEAS

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    Cited by:

    1. Paulo Chávez & Gabriel Rodríguez, 2022. "Time Changing Effects of External Shocks on Macroeconomic Fluctuations in Peru: Empirical Application Using Regime-Switching VAR Models with Stochastic Volatility," Documentos de Trabajo / Working Papers 2022-509, Departamento de Economía - Pontificia Universidad Católica del Perú.
    2. Jacopo Timini & Ayman El-Dahrawy Sánchez-Albornoz, 2019. "The impact of China on Latin America: trade and foreign direct investment channels," Economic Bulletin, Banco de España, issue JUN, pages 1-11.
    3. Gabriel Rodríguez & Renato Vassallo, 2022. "Time Evolution of External Shocks on Macroeconomic Fluctuations in Pacific Alliance Countries: Empirical Application using TVP-VAR-SV Models," Documentos de Trabajo / Working Papers 2022-508, Departamento de Economía - Pontificia Universidad Católica del Perú.

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    More about this item

    Keywords

    China; economic rebalancing; spillovers; commodities;
    All these keywords.

    JEL classification:

    • F01 - International Economics - - General - - - Global Outlook
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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