What a slowing China implies for future, in charts
agricultural products (Brazil), fuel (Gulf nations, Malaysia), minerals and ores (Chile, Peru, Australia), electronics and chips (South Korea, Japan) and machinery (Germany) to China. Of these, the risk is higher for economies where exports contribute significantly to GDP, because they face sharp growth downgrades if a slowing China cuts back on imports. This means that the US, which exports four times more to China in dollar terms than, say, Chile, is less directly impacted because the US economy is led by domestic consumption rather than exports.
In 2019, 155 million tourists travelled from China and collectively spent $254.6 billion. Their top destinations included Southeast Asia, South Korea, Japan, Taiwan, Australia, and Europe. Often travelling in large tour groups, they were big spenders, and supported jobs and incomes in many tourist centres.
The covid-19 pandemic put an end to this flow. When China opened up, countries raced to attract Chinese tourists, but tourism has yet to reach pre-pandemic levels. The global luxury market is another casualty of a slowing China.
Before the pandemic, Chinese tourists travelled to the US and Europe to buy luxury goods to avoid taxes and tariffs in their home country. Nowadays they increasingly opt for domestic luxury brands, or buy from local duty-free retail outlets, which are allowed to sell international brands. Between 2019 and 2022, China’s share of the global personal luxury goods market dropped from 33% to 19%, suggesting that spending has become more cautious.
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