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

36 Pages Posted: 9 Dec 2016

See all articles by Allan Dizioli

Allan Dizioli

IMF; University of Pennsylvania - Department of Economics

Jaime Guajardo

International Monetary Fund (IMF)

Vladimir Klyuev

International Monetary Fund (IMF)

Rui C. Mano

International Monetary Fund

Mehdi Raissi

International Monetary Fund (IMF) - Fiscal Affairs Department

Date Written: August 2016

Abstract

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.

Keywords: Economic growth, China, Indonesia, Malaysia, Philippines, Singapore, Thailand, Association of Southeast Asian Nations, Spillovers, Regional trade, China’;s slowdown and rebalancing, international business cycle, spillovers, Global VAR, Flexible System of Global Models (FSGM), ASEAN-5.

JEL Classification: C32, F44, F62, O41, O53

Suggested Citation

Dizioli, Allan and Guajardo, Jaime and Klyuev, Vladimir and Mano, Rui C. and Raissi, Mehdi, Spillovers from China's Growth Slowdown and Rebalancing to the ASEAN-5 Economies (August 2016). IMF Working Paper No. 16/170, Available at SSRN: https://ssrn.com/abstract=2882607

Allan Dizioli (Contact Author)

IMF ( email )

700 19th Street NW
Washington, DC 20431
United States

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States

Jaime Guajardo

International Monetary Fund (IMF) ( email )

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

Vladimir Klyuev

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Rui C. Mano

International Monetary Fund ( email )

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

HOME PAGE: http://sites.google.com/site/ruimano/

Mehdi Raissi

International Monetary Fund (IMF) - Fiscal Affairs Department ( email )

700 19th Street, NW
Washington, DC 20431
United States

HOME PAGE: http://https://sites.google.com/site/mehdiraissi/

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
90
Abstract Views
866
Rank
584,180
PlumX Metrics