## Spillovers from Large Emerging Economies: How Dominant Is China?

_IMF Working Papers, January 24, 2025_

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## Bibliographic details
- Authors: Hany Abdel-Latif, Adina Popescu
- Published: January 24, 2025
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798229000529.001

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### Methodology
- Model: Bayesian Global Vector Autoregression (GVAR) model.
- Coverage: 63 countries.
- Shocks analyzed: demand-side and supply-side shocks.
- Focus: comparative influence of China versus other G20 emerging markets (G20-EMs) on global variables.

### Key findings
- China's domestic shocks have significantly larger and more pervasive spillover effects on:
  - global GDP,
  - inflation,
  - commodity prices.
- Spillovers from other G20-EMs are more regionally contained with modest global impacts.
- The study underscores China's outsized role in shaping global economic dynamics.
- Other G20-EMs have limited capacity to mitigate potential negative implications from China's economic slowdown in the near term.

### Implications for global policy and markets
- Global macroeconomic outcomes (growth, inflation, commodity prices) are particularly sensitive to shocks originating in China.
- Regional policy coordination may be more effective than global coordination for spillovers originating from other G20-EMs, given their more contained impacts.
- Vulnerabilities to a Chinese slowdown are a key risk for global economic stability.

### Research scope and context
- Subject areas: Economic theory; Emerging and frontier financial markets; Financial markets; Financial sector policy and analysis; Global value chains; Globalization; Oil prices; Prices; Spillovers; Supply shocks.
- Keywords emphasized by the authors: China's contribution; domestic shock; Emerging and frontier financial markets; Emerging Economies; Global; Global transmission; Global value chains; Growth Spillover; GVAR model; IMF working paper No. 25/27; Oil prices; outsized role; Spillovers; Supply shocks.

*IMF Working Paper No. 2025/027 (January 24, 2025) — "Spillovers from Large Emerging Economies: How Dominant Is China?"*

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_Source: https://www.imf.org/en/publications/wp/issues/2025/01/24/spillovers-from-large-emerging-economies-how-dominant-is-china-561220_