Chinese Imports: What's Behind the Slowdown?
35 Pages Posted: 9 Dec 2016
Date Written: May 2016
Real imports in China have decelerated significantly over the last two years to below4 percent (yoy) from double-digit growth in previous years. Weaker investment, partly due to progress in rebalancing from investment to consumption, has been the main factor accounting for about 40-50 percent of slowdown during this period. Weaker exports also account for about 40 percent of slowdown, of which about a quarter is due to stronger RMB. Onshoring - substitution of imported intermediate inputs with domestic production - has not been an additional drag over this period but it continues to slow import growth at a similar pace as previous periods. There is large uncertainty about the impact of rebalancing on the import slowdown due to difficulties in identifying the counterfactual nonrebalancing path.
Keywords: Imports, China, Goods, Services, Demand, Consumption, Exports, Production, Imports; Rebalancing; Exchange Rate; Onshoring
JEL Classification: F31, F14, F40
Suggested Citation: Suggested Citation