Chinese Imports: What's Behind the Slowdown?

35 Pages Posted: 9 Dec 2016

See all articles by Joong Shik Kang

Joong Shik Kang

International Monetary Fund (IMF)

Wei Liao

International Monetary Fund

Date Written: May 2016

Abstract

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

Kang, Joong Shik and Liao, Wei, Chinese Imports: What's Behind the Slowdown? (May 2016). IMF Working Paper No. 16/106. Available at SSRN: https://ssrn.com/abstract=2882519

Joong Shik Kang (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Wei Liao

International Monetary Fund ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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