Abstract

As an important global and regional economic power, the PRC’s growth slowdown may cause large spillover effects to its neighboring economies. Using a multi-sectoral global computable general equilibrium model, this paper quantitatively investigates the impacts of a growth slowdown in the PRC for emerging Asian economies through trade linkages. The results suggest that a growth slowdown of 1.6 percentage points in the PRC would bring about a growth deceleration of 0.26 percentage points in developing Asia as a whole. However, the impacts vary dramatically by economy within developing Asia, reflecting their difference in economic and trade structure.​

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Contents

1. Introduction................................................................................................................3
2. Transmission Channels ............................................................................................. 4
3. Methodology..............................................................................................................6
4. Simulations and Results ............................................................................................ 8
4.1 Impact on Output and Trade .......................................................................... 9
4.2 Sectoral Impacts .......................................................................................... 12
4.3 Impacts on Commodity Markets................................................................... 17
4.4 The Roles of the United States and India..................................................... 18
5. Conclusions............................................................................................................. 20
References ......................................................................................................................... 22​​