The IMF Issues A Chilling Warning About China's Vulnerability To Europe

That chilling forecast from IMF:

Should  such a tail risk of financial volatility emanating from Europe be realised, it would drag China’s growth lower.  The channels of contagion would be felt mainly through trade, with knock-on effects to domestic demand. In the downside scenario outlined in the WEO Update—which  would see global growth falling by 1¾ percentage points relative to the baseline—China’s  growth  would fall by around 4 percentage points (Box 1). The risks to China from Europe are, therefore, both large and tangible.

From 8.25% to 4.25% that is.

chart

Source: IMF

But fear not, says IMF, because China can spend.

This article originally appeared here: IMF: China’s growth could be slowed by 4 percentage point if eurozone blows up
Also sprach Analyst – World & China Economy, Global Finance, Real Estate

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