China's Slowdown and Rebalancing

This paper explores the economic impacts of two related tracks of China's expected transformation—economic slowdown and rebalancing away from investment toward consumption—and estimates the spillovers for the rest of the world, with a special focus on Sub-Saharan African countries. The paper finds that an average annual slowdown of gross domestic product in China of 1 percent over 2016–30 is expected to result in a decline of gross domestic product in Sub-Saharan Africa by 1.1 percent and globally by 0.6 percent relative to the past trends scenario by 2030. However, if China's transformation also entails substantial rebalancing, the negative income effects of the economic slowdown could be offset by the positive changes brought along by rebalancing through higher overall imports by China and positive terms of trade effects for its trading partners. If global supply responds positively to the shifts in relative prices and the new sources of consumer demand from China, a substantial rebalancing in China could have an overall favorable impact on the global economy. Economic growth could turn positive and higher on average, by 6 percent in Sub-Saharan Africa and 5.5 percent globally, as compared with the past trends scenario. Finally, rebalancing reduces the prevalence of poverty in Sub-Saharan Africa compared with the isolated negative effects of China's slowdown, which slightly increase the incidence of poverty. Overall, China's slowdown and rebalancing combined are estimated to increase gross domestic product in Sub-Saharan Africa by 4.7 percent by 2030 and reduce poverty, but the extent of this varies by country.

Bibliographic Details

Main Authors:	Lakatos, Csilla, Maliszewska, Maryla, Osorio-Rodarte, Israel, Go, Delfin
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2016-05
Subjects:	GROWTH RATES, GROWTH RATE, FINANCIAL SERVICES, LINES OF CREDIT, CUSTOMS UNION, FUTURE GROWTH, GOVERNMENT EXPENDITURES, URBANIZATION, PRODUCTION, PRICE INCREASES, PRICE DISTORTIONS, TRADE BALANCE, CAPITAL ACCUMULATION, INTEREST, INCOME, CONSUMER GOODS, FREE TRADE AGREEMENTS, INVESTMENT POLICIES, EMERGING ECONOMIES, REAL GDP, EXCHANGE, GDP PER CAPITA, DEVELOPING COUNTRIES, EXPORTS, ELASTICITY, DISTRIBUTION OF INCOME, ECONOMIC RELATIONS, DISTRIBUTION, EQUILIBRIUM, VARIABLES, CAPITAL STOCK, PRICE, INPUTS, WEALTH, SAVING, MARKET ACCESS, DATA AVAILABILITY, ECONOMIC OUTLOOK, FREE TRADE, FOREIGN DIRECT INVESTMENT, TRENDS, DEVELOPMENT, FOREIGN MARKETS, LABOR MARKET, PRIVATE SAVING, SAVINGS, TECHNICAL ASSISTANCE, GLOBAL ECONOMY, USE VALUE, PER CAPITA INCOME, DEVELOPMENT ECONOMICS, EXTREME POVERTY, ECONOMETRIC MODELS, TELECOMMUNICATIONS, ADVANCED ECONOMIES, VALUE‐ADDED, TRADE RELATIONS, NATURAL RESOURCES, INDUSTRIALIZATION, GLOBALIZATION, PRICE DECLINES, MARKETS, WTO, POTENTIAL OUTPUT, ECONOMIC REFORMS, TRADE POLICY, TARIFF BARRIERS, ECONOMIC MODELS, ELASTICITY OF SUBSTITUTION, GROSS DOMESTIC PRODUCT, DOUBLE TAXATION, CONSUMER DEMAND, SUBSIDIES, COMMODITY PRICE, TAXES, LDCS, INFRASTRUCTURE INVESTMENT, UNEMPLOYMENT, INVESTMENT POLICY, EMERGING MARKETS, PRODUCTIVITY GROWTH, CONSUMPTION, VALUE ADDED, WAGES, TRANSPARENCY, BARRIERS, UNEMPLOYMENT RATE, FINANCIAL CRISIS, FUTURE, VALUE, COMPETITIVENESS, CURRENT ACCOUNT BALANCE, CREDIT, FIXED CAPITAL, WORLD ECONOMY, DEMOGRAPHIC CHANGE, COMPARATIVE ADVANTAGES, FOREIGN INVESTMENT, DEMAND, LABOR FORCE GROWTH, COMPARATIVE ADVANTAGE, AGGREGATE DEMAND, DIVIDEND, CONSUMERS, AGRICULTURE, ECONOMY, SHARES, BENCHMARK, OUTPUT, GOVERNANCE, INSURANCE, EXPOSURE, BUSINESS CYCLES, TAXATION, COMMODITY PRICES, TRADE, FUTURE STUDIES, GDP, GOODS, MARKET SHARE, BILATERAL TRADE, INVESTMENT, BUSINESS CLIMATE, NATURAL RESOURCE, SHARE, FINANCIAL MARKETS, DEVELOPMENT FINANCE, COMMUNICATION, ECONOMIC HISTORY, COMMODITIES, EXCHANGE RATE, MIDDLE‐INCOME COUNTRIES, DEMOGRAPHIC, FOOD PRICES, CAPITAL INVESTMENT, COMMODITY, POSITIVE EFFECTS, GLOBAL ECONOMIC PROSPECTS, PRICES, DEVELOPMENT POLICY,
Online Access:	http://documents.worldbank.org/curated/en/2016/05/26362958/chinas-slowdown-rebalancing-potential-growth-poverty-impacts-sub-saharan-africa https://hdl.handle.net/10986/24506
Tags:	Add Tag No Tags, Be the first to tag this record!