Investment-Led Growth in China: Global Spillovers

November 6, 2012

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Format: Chicago

Ashvin Ahuja, and Malhar S Nabar. Investment-Led Growth in China: Global Spillovers, (USA: International Monetary Fund, 2012) accessed November 8, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Over the past decade, China’s growth model has become more reliant on investment and its footprint in global imports has widened substantially. Several economies within China’s supply chain are increasingly exposed to its investment-led growth and face growing risks from a deceleration in investment in China. This note quantifies potential global spillovers from an investment slowdown in China. It finds that a one percentage point slowdown in investment in China is associated with a reduction of global growth of just under one-tenth of a percentage point. The impact is about five times larger than in 2002. Regional supply chain economies and commodity exporters with relatively less diversified economies are most vulnerable to an investment slowdown in China. The spillover effects also register strongly across a range of macroeconomic, trade, and financial variables among G20 trading partners.

Subject: Commodities, Economic sectors, Exports, Imports, Industrial production, International trade, Manufacturing, Production

Keywords: China, China FAI decline, Economy, Export, Exports, GDP, Global, Growth slowdown, Import basket, Imports, Industrial production, Investment, Manufacturing, Nontradables investment slowdown, Slowdown in China, Spillovers, Trading partner, WP

Publication Details

Pages:

23
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2012/267
Stock No:

WPIEA2012267
ISBN:

9781475556414
ISSN:

1018-5941

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