{
  "title": "Spillovers from Migration and China's Transition",
  "publication": "IMF News, September 27, 2016",
  "sourceUrl": "https://www.imf.org/en/news/articles/2016/09/26/am16-na270916-spillovers-from-chinas-transition-and-migration",
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  "summary": "Publication date: September 27, 2016",
  "publishDate": "2016-09-27",
  "sections": [
    {
      "heading": "Overview and key finding",
      "content": "- Publication date: September 27, 2016\n- Key finding: \"1 percent increase in migrant share in adult population results in 2 percent higher GDP in the long run.\""
    },
    {
      "heading": "Spillovers from China's transition",
      "content": "- Channels of international influence:\n  - Trade: countries exporting machinery and raw materials to China face reduced appetite for their products and commodities; Asian suppliers are particularly affected.\n  - Commodity prices: lower Chinese demand can reduce prices due to China’s large share of global consumption of metals and oil.\n  - Financial channels: reactions of asset prices in other countries to events in China can amplify spillovers.\n- Implications:\n  - A well-managed transition to lower but more sustainable growth would reduce risks of a more disruptive adjustment later.\n  - A bumpy or incomplete transition could exacerbate negative ripple effects."
    },
    {
      "heading": "Policy recommendations for China and its partners",
      "content": "- For China:\n  - Accept the slowdown and communicate policy intentions clearly.\n- For China’s trade partners:\n  - Adjust to a permanently lower Chinese demand.\n  - Use available resources to tweak growth models.\n  - Encourage trade through new global and regional agreements.\n- For commodity exporters:\n  - Use buffers where available.\n  - Rearrange economic plans toward new revenue sources.\n- For low-wage, labor-rich countries:\n  - Potentially benefit from China moving up the production value chain by taking up higher-value manufacturing and production.\n- Global recommendation:\n  - Avoid protectionism, which would be detrimental to trade over the long term."
    },
    {
      "heading": "Migration: macroeconomic effects and mechanisms",
      "content": "- Long-run effect on host-country GDP per capita:\n  - A one percentage point increase in the share of migrants in the adult population could increase GDP per capita in host countries by about 2 percent in the long run.\n- Skill composition effects:\n  - High-skilled migrants contribute positively to host economies.\n  - Lower-skilled migrant workers can raise productivity growth indirectly (for example, enabling high-skilled local women to return to or spend more time at work).\n  - In the long run, host economies can benefit from migration of both high- and low-skilled workers.\n- Demographic benefits:\n  - Migrants, predominantly of working age, can offer some relief for an aging population."
    },
    {
      "heading": "Challenges in countries of origin",
      "content": "- Consequences of emigration:\n  - Departure of the young and the educated can take a toll on long-term growth.\n  - Loss of human capital translates into lower productivity, worsening of skill composition, and dampened tax revenue.\n- Mitigation:\n  - Some losses can be mitigated through remittances and diaspora networks.\n  - Ultimately, origin countries should tackle the triggers that drive outmigration."
    },
    {
      "heading": "Challenges and policy responses in host countries",
      "content": "- Social and political challenges:\n  - Arrivals can provoke social tensions, security concerns, and political backlash.\n- Short-run fiscal implications:\n  - Policies to facilitate integration are costly in the short run and can add fiscal pressure.\n- Integration policies and benefits:\n  - Swift labor market integration is key: improved labor market policies, access to education, and support to migrant enterprises help migrants obtain and keep jobs and increasingly contribute to fiscal accounts.\n  - Better social integration can reduce tensions with mainstream society.\n- Labor market effects:\n  - Labor market integration is complex due to language barriers and lack of recognition of work experience and skills.\n  - The study finds migrants do not affect labor conditions of native workers significantly.\n  - In the long term, migrants increase labor productivity, which raises income levels for all.\n\nIMF News — Spillovers from Migration and China's Transition (September 27, 2016).\n\n---\n\n\n References\n\n- https://www.imf.org/en/News/country-focus\n- PRESS CENTER\n- IMF Research\n- http://www.imf.org/external/pubs/ft/weo/2016/02/index.htm\n- new study\n- IMF spillover reports\n- China’s rebalancing explained (blog)\n- Migration in Europe (blog)\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2016/09/26/am16-na270916-spillovers-from-chinas-transition-and-migration"
    }
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    "[Markdown version](/en/news/articles/2016/09/26/am16-na270916-spillovers-from-chinas-transition-and-migration/index.md)",
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    "Published: September 27, 2016",
    "Publication date: September 27, 2016",
    "Key finding: \"1 percent increase in migrant share in adult population results in 2 percent higher GDP in the long run.\"",
    "Channels of international influence:",
    "Implications:",
    "For China:",
    "For China’s trade partners:",
    "For commodity exporters:",
    "For low-wage, labor-rich countries:",
    "Global recommendation:",
    "Long-run effect on host-country GDP per capita:",
    "Skill composition effects:",
    "Demographic benefits:",
    "Consequences of emigration:",
    "Mitigation:",
    "Social and political challenges:",
    "Short-run fiscal implications:",
    "Integration policies and benefits:",
    "Labor market effects:",
    "[https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[IMF Research](https://www.imf.org/en/news/search)",
    "[http://www.imf.org/external/pubs/ft/weo/2016/02/index.htm](http://www.imf.org/external/pubs/ft/weo/2016/02/index.htm)",
    "[new study](http://www.imf.org/external/ns/cs.aspx?id=29)",
    "[IMF spillover reports](http://www.imf.org/external/ns/cs.aspx?id=316)",
    "[China’s rebalancing explained (blog)](https://blog-imfdirect.imf.org/2016/09/06/chinas-rebalancing-explained-in-6-charts/)",
    "[Migration in Europe (blog)](https://blog-imfdirect.imf.org/2016/07/20/emigration-slows-eastern-europes-catch-up-with-the-west/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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