China has been the growth engine for the world economy in a decade. Hence, for better or for worse, whatever happens to the Chinese economy will have impactful rippling effects on the rest of the world.  While the risks are clear, many analysts are understandably reluctant to be drawn into worst-case scenarios in the belief the coronavirus outbreak will peak, or possibly has already peaked.

  1. China is currently the second-largest economy of the world after the US.
  2. China accounts for 18.7% of world economic output (on a purchasing power parity basis)
  3. China accounts for 28% of world manufacturing production
  4. China has a key significance for global value chains
  5. China accounts for 13% of world exports and 11% of imports.
  6. China is the second-largest importer of manufacturing goods (1.674 trillion USD in 2019) accounting for 11% of global imports and the largest exporter (2.524 trillion USD in 2019) responsible for 13% of global exports.
  7. The major trade partners in Chinese's exports in 2019 included the US (19.1%), Hong Kong SAR (10.1%), Japan (6.6%), Germany (4.1%), South Korea (3.7%), Netherlands (3.75), Vietnam (3.4%), India (3.0%) and France (2.2%).
  8. The share of China in global exports is the highest in the case of computers, office, communications, and professional equipment (34.1%), textiles, leather, and apparel (32.8%) as well as glass and non-metallic products (23.8%). China’s accounts for 5% of global exports of transportation equipment and partsina accounts for over 40 per cent of the parts needed for electronic goods made in Japan, India and Canada; 30 per cent for South Korea, Taiwan and France.
  9. China is the world’s second-largest recipient country of foreign direct investment (FDI) inflow, and the third biggest FDI exporter.
  10. China is not only the largest trading partner with over 125 countries, it also holds a central position in the networks of global supply chains.
  11. Chinese outbound travelers – averaging around 150 million annually – are the world’s biggest tourism spenders.


S&P Global Ratings lowered its forecast for China's 2020 GDP growth to 5.0% from the initially projected 5.7% on the back of the coronavirus outbreak. China accounts for one-third of global growth so a 1-percentage-point slowdown in the country's growth rate is likely to have a material effect on global growth. Most of the outbreak's impact on the Chinese economy will be felt in the first quarter and a firm recovery may only take hold in the third quarter. If the number of reported cases peaks in February, the country's economy could grow by 5.5%, but if it peaks in April, GDP growth could come up to only 4.4%. If the virus cannot be contained, a material risk, the economic impact could develop exponentially with significant credit implications. China's close connection to the rest of the global economy and its growing dependence on consumption mean that the rapidly spreading coronavirus may weaken domestic spending and adversely affect foreign businesses that depend on the country's consumer demand


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