25 Sep 2015

China’s slowdown: When the dragon catches the flu, Europe sneezes

Mikkel Barslund / Cinzia Alcidi

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Authors: Mikkel Barslund and Cinzia Alcidi

Series: CEPS Commentary No of pp: 4

Notwithstanding the erratic stock market responses around the world, this CEPS Commentary argues that while a slowdown of the world’s second-largest economy may not be good news for Europe, its effects will not be as bad as headlines would have us believe. In the short term, it finds that the biggest risks from the Chinese slowdown may be political, stemming from a weakening of the Renminbi, either from actions taken by China’s central bank and/or from large capital outflows.

Mikkel Barslund is Research Fellow at CEPS. Cinzia Alcidi is LUISS Research Fellow and Head of the Economic Policy research unit at CEPS