Spillovers from China onto Sub-Saharan Africa: Insights from the Flexible System of Global Models (FSGM)

Derek Anderson, Jorge Canales Kriljenko, Paulo Drummond, Pedro Espaillat and Dirk Muir

No 2015/221, IMF Working Papers from International Monetary Fund

Abstract: What is the impact of economic spillovers from China on sub-Saharan Africa (SSA)? This is an increasingly important question because of China’s growing economic role as a partner of SSA countriesfor both trade and the buildup of infrastructure in the region. The impact of spillovers from China has been an open question because of the challenge to use an internally consistent framework with solid economic foundations that accounts for both the direct impact China may have on individual countries in SSA through a variety of channels (trade, investment, financial) as well as the impact on the region through the global economy (economic activity and commodity prices). This paper explores those channels of transmission and provides illustrative order of magnitude for the short- and medium-term economic impact by using AFRMOD, a module of the Flexible System of Global Models (FSGM), a multicountry general equilibrium model developed at the IMF. Three alternative scenarios are considered: first, lower potential output in China that is originally misperceived as a temporary cyclical slowdown; second, structural reforms in China that aim to increase potential output; and third, a relocation of low-end manufacturing to sub-Saharan Africa.

Keywords: WP; exchange rate; economic activity; monetary policy; commodity exporter; commodity importer; Spillovers; general equilibrium models; macroeconomic interdepedence; China; Africa; relocation scenario; China-SSA trade; productivity-enhancing reform; Exports; Potential output; Commodity prices; Imports; Sub-Saharan Africa; Global (search for similar items in EconPapers)
Pages: 34
Date: 2015-10-06
References: Add references at CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=43332 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2015/221

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().