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China’s Slowdown and Rebalancing: Impacts on Sub-Saharan Africa

Author

Listed:
  • Lakatos, Csilla

    (The World Bank)

  • Maliszewska, Maryla

    (The World Bank)

  • Osorio-Rodarte, Israel

    (The World Bank)

  • Go, Delfin

    (The World Bank)

Abstract

This paper explores the economic impacts of two related tracks of China’s expected transformation, that is, economic slowdown and rebalancing away from investment toward consumption. It estimates the spillovers for the rest of the world with a special focus on Sub-Saharan African countries. By 2030, an average 1 percent annual slowdown of China’s GDP is expected to result in 1.1 percent GDP decline in Sub-Saharan Africa and a 0.6 percent global slowdown relative to past trends. However, if China’s transformation also entails substantial rebalancing, the negative income effects of the economic slowdown could be offset through higher overall imports by China and positive terms-of-trade effects for its trading partners. Slowdown and rebalancing in China is estimated to increase GDP by 4.7 percent for Sub-Saharan Africa and by 4.8 percent for the global economy. China’s transformation is also estimated to reduce poverty, but the extent depends on country in the Sub-Saharan Africa.

Suggested Citation

  • Lakatos, Csilla & Maliszewska, Maryla & Osorio-Rodarte, Israel & Go, Delfin, 2017. "China’s Slowdown and Rebalancing: Impacts on Sub-Saharan Africa," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 32(4), pages 759-803.
    • Handle: RePEc:ris:integr:0738
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    Keywords

    Trade; Poverty; Africa; China; Computable General Equilibrium Model; Microsimulations;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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