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Spillovers from Large Emerging Economies: How Dominant Is China?

Author

Listed:
  • Hany Abdel-Latif
  • Ms. Adina Popescu

Abstract

This paper investigates the global economic spillovers emanating from G20 emerging markets (G20-EMs), with a particular emphasis on the comparative influence of China. Employing a Bayesian Global Vector Autoregression (GVAR) model, we assess the impacts of both demand-side and supply-side shocks across 63 countries, capturing the nuanced dynamics of global economic interactions. Our findings reveal that China's contribution to global economic spillovers significantly overshadows that of other G20-EMs. Specifically, China's domestic shocks have significantly larger and more pervasive spillover effects on global GDP, inflation and commodity prices compared to shocks from other G20-EMs. In contrast, spillovers from other G20-EMs are more regionally contained with modest global impacts. The study underscores China's outsized role in shaping global economic dynamics and the limited capacity of other G20-EMs to mitigate any potential negative implications from China's economic slowdown in the near term.

Suggested Citation

  • Hany Abdel-Latif & Ms. Adina Popescu, 2025. "Spillovers from Large Emerging Economies: How Dominant Is China?," IMF Working Papers 2025/027, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2025/027
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