China’s high growth has been accompanied by a dramatic increase in its integration with the world economy through trade, investment and financial flows. There are three aspects to this integration: an increased presence of China in global markets, especially those of developed countries like the US; a sharp increase in China’s absorption of energy resources, mineral raw materials, intermediates and agricultural products from the world economy, especially from developing countries such as those in Africa; and a two-way flow of investment and capital into and out of China, with outward investment directed in substantial measure to developing countries. This process of integration implies that any slowdown of China’s scorching pace of economic growth would have significant implications for the global economy, with differential effects on different countries. Even though it would be premature to predict a slowdown in Chinese growth, this paper examines the factors that could potentially trigger such an outcome. Taking into account the implications of alternative routes through which such an outcome may materialize, it also assesses the effects that a slowing of growth could have on countries differentially placed with respect to their integration with China.
