Effects of China’s slowdown to vary across the region

Concerns over the impact on sub-Saharan Africa (SSA) of a further slowdown in China have resurfaced over the past couple of weeks. While we do not expect China to experience a hard landing, we do think that growth there will continue to weaken over the next couple of years as policymakers attempt to wean the economy off its reliance on investment. The impact on countries in SSA will be determined by what they export, as much as by the amount they export, to China. Countries that export large amounts of industrial commodities to China look particularly vulnerable to a slowdown in investment spending. For these economies, most notably Zambia and South Africa, we think that growth over the next couple of years will fall well short of the rates achieved over the past decade.