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    How Would a Slowdown in the People’s Republic of China Affect its Trading Partners?

    Thorbecke, Willem | January 2017
    Abstract
    The People’s Republic of China (PRC) has become an important importer for many countries. This paper investigates how turbulence in the PRC can spill over to trading partners through the trade channel. Exports from several East Asian and Southeast Asian countries to the PRC exceed 10% of their gross domestic products. To shed light on economies’ exposures to the PRC, this paper estimates a gravity model. The results indicate that Taipei,China and members of the Association of Southeast Asian Nations are exposed to the PRC because they produce goods for the PRC market and are exposed to advanced economies because they ship parts and components to the PRC for processing and reexport to the West. The Republic of Korea is more exposed to a slowdown in advanced economies that purchase processed exports from the PRC than to a slowdown in the PRC. Major commodity exporters such as Australia, Brazil, Indonesia, and Saudi Arabia and exporters of sophisticated consumption and capital goods such as Germany and Switzerland are exposed to a slowdown in the PRC domestic market. This paper also estimates import elasticities for the PRC. The results indicate that imports for processing into the PRC are closely linked to processed exports from the PRC to the rest of the world and that ordinary imports are closely linked to PRC gross domestic product. The renminbi exerts only a weak impact on imports, however. The paper concludes by recommending that firms and countries diversify their export base and their trading partners to reduce their exposures to the PRC and to advanced economies.
    Citation
    Thorbecke, Willem. 2017. How Would a Slowdown in the People’s Republic of China Affect its Trading Partners?. © Asian Development Bank Institute. http://hdl.handle.net/11540/6789.
    Keywords
    Resources evaluation
    Input output analysis
    Import volume
    Export volume
    Export Development
    Economic agreements
    International market
    Import policy
    Export policy
    Project Evaluation & Review Technique
    Operations Evaluation
    Evaluation
    World Trade
    Trade Volume
    Trade Promotion
    Trade Flows
    Trade Development
    Patterns Of Trade
    Participatory monitoring and evaluation
    Participative management
    Foreign trade routes
    Trade routes
    Foreign trade and employment
    Show allCollapse
    Citable URI
    http://hdl.handle.net/11540/6789
    Metadata
    Show full item record
    Thumbnail
    adbi-wp634.pdf (1.050Mb)
    Author
    Thorbecke, Willem
    Theme
    Evaluation
    Trade

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    Copyright 2016-2021 Asian Development Bank Institute, except as explicitly marked otherwise