China and Asia in Global Trade Slowdown

IMF Working Papers, May 26, 2016

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Asia and China made disproportionate contributions to the slowdown of global trade growth in 2015.
China’s import growth slowed starkly, driven by both external and domestic factors, including a rebalancing of demand.
Econometric results point to weak investment and rebalancing as the main causes of the import slowdown.
Spillover effects from China’s rebalancing are estimated for some 60 countries using value-added trade data, and are found to be more negative on Asia and commodity exporters than others.

China and Asia were major contributors to the 2015 global trade growth slowdown.
Main proximate drivers of China’s import slowdown:
- Weak investment demand.
- Rebalancing of domestic demand toward consumption and away from investment.
Spillover pattern:
- Spillovers estimated for about 60 countries.
- Negative spillovers are more pronounced on Asian economies and on commodity exporters.
Subject tags listed: Consumption, Export performance, Exports, Global value chains, Globalization, Imports, International trade, National accounts.
Keywords listed include: Asia and Pacific, capital goods, China's consumption, consumption imports, exchange rate, growth shock, import demand, import growth slowdown, investment demand, investment growth, spillovers, trade elasticities, trade linkages, trading partners, upstream trade partner.

Results are based on econometric analysis linking import growth to domestic factors (investment, rebalancing) and external factors.
Spillover estimates use value-added trade data to trace effects across trading partners.

1. Spillover Results: Unitary Rebalancing
- 1. Spillover Results: Unitary Rebalancing (Markdown version)
- 1. Spillover Results: Unitary Rebalancing (PDF)