International Trade Working Paper

The International Trade Working Paper series promptly documents and disseminates reviews, analytical work and think-pieces to facilitate the exchange of ideas and to stimulate debates and discussions on issues that are of interest to developing countries in general and Commonwealth members in particular. The issues considered in the papers may be evolving in nature, leading to further work and refinement at a later stage.


An Assessment of the Impact of the Slowdown of the Chinese Economy on Commonwealth Member Countries

One of the most prominent factors contributing to sluggish global trade growth in recent years has been the rebalancing of China's economy from being investment-oriented to consumption-driven since 2012. This has resulted in dwindling import demand for commodities and raw materials from many Commonwealth countries, as well as a slump in commodity prices worldwide. This paper explores the impacts of China's sluggish economic growth on Commonwealth member countries' long- and short-run trade dependencies. Its findings suggest that, while all areas of Commonwealth member countries have suffered from trade contraction, two significantly affected areas are Commonwealth sub-Saharan Africa (SSA) and Commonwealth small and vulnerable economies (SVEs). Its trade elasticity estimation suggests that Commonwealth trade dependency on Chinese economic expansion has faltered since 2011. It also finds that, while the Global South's relative significance in Commonwealth trade has been almost stagnant during the past decade, for Commonwealth SSA and SVEs it has continued to rise.


Keywords: trade dependency, Commonwealth sub-Saharan Africa, China, small states
JEL: O11: Economic Development, Innovation, Technological Change, and Growth / Economic Development / Macroeconomic Analyses of Economic Development; F10: International Economics / Trade / Trade: General; F63: International Economics / Economic Impacts of Globalization / Economic Impacts of Globalization: Economic Development
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