Spillovers from China’s Growth Slowdown and Rebalancing to the ASEAN-5 Economies

By Allan Dizioli, Jaime Guajardo, Vladimir Klyuev, Rui Mano, Mehdi Raissi

August 9, 2016

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Allan Dizioli, Jaime Guajardo, Vladimir Klyuev, Rui Mano, and Mehdi Raissi. Spillovers from China’s Growth Slowdown and Rebalancing to the ASEAN-5 Economies, (USA: International Monetary Fund, 2016) accessed September 18, 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

After many years of rapid expansion, China’s growth is slowing to more sustainable levels and is rebalancing, with consumption becoming the main growth driver. This transition is likely to have negative effects on its trading partners in the near term. This paper studies the potential spillovers to the ASEAN-5 economies through trade, commodity prices, and financial markets. It finds that countries with closer trade linkages with China (Malaysia, Singapore, and Thailand) and net commodity exporters (Indonesia and Malaysia) would suffer the largest impact, with growth falling between 0.2 and 0.5 percentage points in response to a decline in China’s growth by 1 percentage point depending on the model used and the nature of the shock. The impact could be larger if China’s slowdown and rebalancing coincides with bouts of global financial volatility. There are also opportunities from China’s rebalancing, both in merchandise and services trade, and there is preliminary evidence that some ASEAN-5 economies are already benefiting from these trends.

Subject: Commodities, Commodity prices, Consumption, Exports, Financial sector policy and analysis, Imports, International trade, Prices, Spillovers

Keywords: ASEAN-5, China’s slowdown and rebalancing, China's slowdown, Commodity exporter, Commodity price, Commodity prices, Exports, Flexible System of Global Models (FSGM), Global, Global VAR, Goods export, Growth slowdown, Imports, Imports fall, International business cycle, Net commodity importer, Policy shock, Service imports, Spillovers, Trading partners, WP

Publication Details

Pages:

35
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2016/170
Stock No:

WPIEA2016170
ISBN:

9781475524260
ISSN:

1018-5941

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