China's Slowdown and Rebalancing : Potential Growth and Poverty Impacts on Sub-Saharan Africa
This paper explores the economic impacts of two related tracks of China's expected transformation—economic slowdown and rebalancing away from investment toward consumption—and estimates the spillovers for the rest of the world, with a special...
Main Authors: | , , , |
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Format: | Working Paper |
Language: | English en_US |
Published: |
World Bank, Washington, DC
2016
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Subjects: | |
Online Access: | http://documents.worldbank.org/curated/en/2016/05/26362958/chinas-slowdown-rebalancing-potential-growth-poverty-impacts-sub-saharan-africa http://hdl.handle.net/10986/24506 |
Summary: | This paper explores the economic impacts
of two related tracks of China's expected
transformation—economic slowdown and rebalancing away from
investment toward consumption—and estimates the spillovers
for the rest of the world, with a special focus on
Sub-Saharan African countries. The paper finds that an
average annual slowdown of gross domestic product in China
of 1 percent over 2016–30 is expected to result in a decline
of gross domestic product in Sub-Saharan Africa by 1.1
percent and globally by 0.6 percent relative to the past
trends scenario by 2030. However, if China's
transformation also entails substantial rebalancing, the
negative income effects of the economic slowdown could be
offset by the positive changes brought along by rebalancing
through higher overall imports by China and positive terms
of trade effects for its trading partners. If global supply
responds positively to the shifts in relative prices and the
new sources of consumer demand from China, a substantial
rebalancing in China could have an overall favorable impact
on the global economy. Economic growth could turn positive
and higher on average, by 6 percent in Sub-Saharan Africa
and 5.5 percent globally, as compared with the past trends
scenario. Finally, rebalancing reduces the prevalence of
poverty in Sub-Saharan Africa compared with the isolated
negative effects of China's slowdown, which slightly
increase the incidence of poverty. Overall, China's
slowdown and rebalancing combined are estimated to increase
gross domestic product in Sub-Saharan Africa by 4.7 percent
by 2030 and reduce poverty, but the extent of this varies by country. |
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