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GLOBAL TRADE WATCH

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TRADE DEVELOPMENTS
IN 2015
Public Disclosure Authorized

Cristina Constantinescu, Aaditya Mattoo, and Michele Ruta

March 9, 2016
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1611579_Global_Trade_Watch.indd 1 3/8/16 1:47 PM

 Cover: By debcha, July 8, 2011. Singapore Harbour.

1611579_Global_Trade_Watch.indd 2 3/8/16 1:47 PM

 Global Trade Watch
Trade Developments in 2015*
Cristina Constantinescu, Aaditya Mattoo, and Michele Ruta

World Bank

March 9, 2016

Main Messages
Trade Developments in 2015
• After sharply declining in the first half of 2015, world trade began to grow, albeit at a slow pace.
Preliminary data indicate that merchandise import growth was 1.7 percent in 2015, down from
3 percent in 2014.

• Recent trade developments should be seen in the context of a deceleration in trade growth since
the early 2000s, and particularly since the Global Financial Crisis. These developments reflected
a combination of old and new cyclical factors as well as enduring structural determinants, such
as the maturation of global value chains and the slower pace of trade liberalization. Our estimates
suggest, however, that cyclical factors dominated in 2015, accounting for approximately two thirds
of the trade slowdown.

• While weak import demand has been mostly concentrated in advanced economies in recent years,
2015 was different. The trade downturn and (partial) rebound in 2015 can be traced back to
emerging economies. Emerging Asia, which accounts for more than a quarter of world trade, was
the epicenter of the 2015 trade downturn and incipient rebound. Emerging Asia’s import decline
accounted for 94 percent of the contraction in world import volumes. Developments in other
regions also matter. In particular, trade developments in Latin America and Eastern Europe and
Central Asia mostly reflected lower imports of recession hit commodity exporters such as Brazil
and Russia. Latin America contributed 6 percent to the downward pull in global imports in 2015.
Except for Japan, imports and exports of advanced economies did not show signs of a significant
downturn, but were sluggish.

• Lower commodity prices and China’s transition to a new growth path appear to be two mutually
reinforcing factors that created weak import demand in emerging economies. Lower commodity
prices have reduced real incomes in commodity producers and led to a contraction in their
imports from all regions, including China. At the same time, the gradual shift from investment

* Global Trade Watch—a joint product of the Trade & Competitiveness Global Practice and the Trade &
International Integration Team of the Development Research Group—provides up-to-date data from an array of
sources, along with analysis of recent trade developments. We are grateful to Jos Ebregt, Anabel Gonzalez, Bert
Hofman, Ayhan Kose, Pascal Lamy, Maryla Maliszewska, Franziska Lieselotte Ohnsorge, Sudhir Shetty, Nikola
Spatafora, Marc Stocker, and Daria Taglioni for their insightful comments and suggestions.

1611579_Global_Trade_Watch.indd 1 3/8/16 1:47 PM

 to consumption in China, and the more significant contraction in its industrial production seen in
early 2015, have reduced its imports from other regions, including commodity producers.

A Closer Look at Trade Spillovers from China’s Rebalancing

• China’s transition to a new, slower growth path, less dependent on investment and industrial
production, was a factor behind recent trade developments. If China’s imports had not fallen in
2015, world merchandise import volume growth would have been 2.1 percent rather than the actual
1.7 percent. At the same time, China too faced weaker external demand for its exports, initially in
the advanced countries and more recently in the commodity producing countries. Changes in China
have short-term macroeconomic and longer-term structural aspects that are affecting the pattern
of production and trade in East Asia and beyond and are manifested in changes in manufacturing,
commodities, and services.

• The short-term impact on manufacturing was most visible in East Asia. Since the slowdown was
concentrated in China’s industrial sector, which is both more import-intensive and more strongly
linked to international (particularly East Asian) value chains than other sectors of the economy,
the impact on trade was magnified. In the longer term, the scope for recovery in manufacturing
exports will, on the one hand, be limited by diminished growth in demand in China. On the other
hand, rebalancing from investment to consumption is likely to create opportunities for exporters
of final goods and may eventually boost upstream intermediate and capital goods sectors that are
now adversely affected.

• China’s transition is also having an impact on commodity exporters even though developments
in commodity markets are heavily influenced by exogenous factors, such as the glut in fuels.
China accounts for 13 percent of world commodity imports and its share is as much as 40 percent
for certain metals. The impact of the transition on different commodity exporters depends on
their exposure to demand in China. However, the fact that commodity exporters are seeing lower
commodity prices rather than declining export volumes suggests that enhanced supply is an
important factor—though expectations of lower future demand may also be playing a role.

• The gradual rebalancing of the economy from investment to consumption is also shifting China’s
demand from goods to services. Part of this demand is being met by cross-border imports and
consumption abroad, and growth in these areas is already visible. More time and data will be
needed to determine if these shifts presage longer-term trends.

• Looking ahead, the rebalancing of the Chinese economy will influence trends in world trade. But
how the transition happens will affect how much global trade fluctuates in the coming years.

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 Trade Developments in 2015
Overview of Trade Developments
After sharply declining in the first half of 2015, world trade again began to grow, albeit at a slow
pace. Trade developments in 2015 reflected a combination of factors: persistent weak global
demand and structural changes in world trade, compounded by falling commodity prices and
China’s transition to a new growth path.

High-frequency statistics suggest that after the downturn in world trade volumes in the first half
of 2015, trade began to recover starting in the third quarter albeit at a slower pace. During 2014
merchandise import volumes increased to levels above the trend of the past three years (Figure 1).
The first half of 2015 saw a reversal of this dynamic, leading to a contraction in import volumes of
around 3.5 percent (quarter over quarter [q/q] annualized), the first such occurrence since the Great
Recession. In the second half of 2015, growth was positive again, yet below that seen in the second half
of 2014. Preliminary data indicate that world merchandise import growth in 2015 was 1.7 percent.1
Within the context of the broader global trade slowdown (Constantinescu, Mattoo, and Ruta 2015),
the developments in 2015 appear to have distinct characteristics, which are investigated in this note.

Figure 1:  The Recent Decline and Partial Recovery in World Merchandise Import Volumes
14.0 110
12.0 108
10.0
106
8.0
6.0 104

4.0 102
2.0 100
0.0
98
–2.0
–4.0 96

–6.0 94
2012 2013 2014 2015

Percent change, q/q annualized Index (2012Q1 = 100, rhs) Linear (Index, rhs)

Source: CPB Netherlands Bureau of Economic Policy Analysis.

Note: Seasonally adjusted data. Country coverage explained in Data Notes.

The trade downturn and (partial) rebound in 2015 can be traced back to emerging economies. Emerging
Asia, which accounts for more than a quarter of world trade, was the epicenter of the 2015 trade
downturn and incipient rebound. In the first half of 2015, both exports and imports of Emerging Asia

1
  There is a statistical discrepancy between high frequency data on import and export volumes, which is due to
factors such as measurement errors and incompleteness of the data. For 2015 this discrepancy is especially large,
with preliminary data indicating a world export growth of 3.3 percent, which may reflect large measurement errors
due to price uncertainty or even disguised capital outflows. For the trade aggregate estimates, this note draws upon
import data, which are generally regarded as more reliable. But this uncertainty on the trade volume figures is an
important caveat to bear in mind and only more time and data will allow to refine the findings discussed here.

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 dropped by 5.1 and 10.1 percent, respectively, in annualized terms, losing all the momentum gained in
the last two quarters of 2014 (Figure 2). In the second half of 2015, Emerging Asia’s export volumes
were stagnant, and even declining towards the end of the year, while growth in import volumes was
positive, but weak. Developments in other regions also matter. In particular, import volumes of Latin
America declined by 0.7 percent in 2015, while those of Eastern Europe and Central Asia dropped
3.7 percent (in annualized terms) in the first half of the year and then recovered in the second half.
These developments mostly reflected lower imports of recession-hit commodity exporters such as
Brazil and Russia. Except for Japan, imports and exports of advanced economies did not show signs
of a significant downturn, but were sluggish.2

Figure 2:  The Regional Pattern of the Trade Downturn and Partial Recovery

Merchandise Export Volume Merchandise Import Volume

125 120
120
115
115
110 110
105 105
100
100
95
90 95
Mar-12
Jun-12
Sep-12
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15

Mar-12
Jun-12
Sep-12
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15
Advanced Economies Emerging Market and Developing Economies Emerging Asia
Japan Europe and Central Asia Latin America

Sources: CPB Netherlands Bureau of Economic Policy Analysis.

Note: Three-Month Moving Average, Jan. 2012 = 100. Seasonally adjusted data. Group composition in Data Notes.

Recent trade developments should be seen in the context of a deceleration in trade growth since
the early 2000s, and particularly since the Global Financial Crisis. Figure 3 shows that global
merchandise trade volume growth was approximately 7 percent a year on average from 1986 to 2000
(“the long 1990s”), roughly two times world real GDP growth. This period was exceptional compared
to the preceding and subsequent 15 years. Since the Global Financial Crisis, trade growth has been
particularly subdued. From 2008 to 2014, international trade grew at half the rate of 1986–1990 and
at the same pace as global output.

Understanding Trade Developments

The trade slowdown reflects both cyclical and structural factors. In previous work (Constantinescu,
Mattoo and Ruta, 2015), we estimate the relationship between world trade and GDP in the last four
decades and find that the long-term trade elasticity rose significantly in the 1990s, then declined in
the 2000s. Trade appears to have grown more slowly not only because global growth is lower, but also
because that growth has become less trade-intensive. A decomposition of the trade slowdown shows
that short-term determinants (or cyclical factors such as weak demand) accounted for two thirds of the

2
  Appendix Figures A1 and A2 provide a more detailed breakdown of export and import volumes and values by region.

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 slowdown in merchandise trade volumes in 2015, while long-term (or structural) factors explain the
remaining one third (Figure 4).3

Figure 3:  Average Growth Rates in Global Merchandise Trade and GDP, Selected Periods,
percent
8
7
6
5
4
3
2
1
0
5 0 4
98 00 01 12 13 14
0–1 6–2 1 –2 20 20 20
197 198 200

Volume of merchandise imports Gross domestic product, constant prices

Source: IMF World Economic Outlook.

Figure 4:  Decomposition of Growth in World Trade Volume, percent

15%

10%

5%

0%

–5%

–10%

–15%
2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2012

2013

2014

2015
2011

Short-term component Long-term component

Trade growth rate Model prediction

Source: IMF World Economic Outlook, CPB Netherlands Bureau of Economic Policy Analysis and authors’
calculations.
Note: Trade in this figure referes to merchandise imports. 2015 GDP is an IMF WEO estimate.

3
  The predicted import growth in 2015 and its average across the 2000s were 1.8 and 3.6 percent, respectively.
Similarly, the long run component for 2015 and its average across the 2000s were 2.8 and 3.5 percent,
respectively. Hence, long-run growth contributed 35 percent of the predicted decline in the 2000s—where
35 percent = (3.5 – 2.8)*100/(3.6 – 1.8)—while the remaining 65 percent can be ascribed to short-run factors.

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 A decomposition of the trade growth suggests the critical role of emerging economies in 2015. While
weak world import demand has been mostly concentrated in advanced economies in recent years,
2015 presented some new characteristics. According to preliminary figures, Emerging Asia’s import
decline accounted for 94 percent of the contraction in world import volumes, with China playing an
important role (Figure 5).4 Latin America contributed 6 percent to the downward pull in global imports
in 2015, mostly reflecting lower imports of Brazil.

Figure 5:  Contributions to Year-on-Year Growth in World Merchandise Import Volumes,

2012–15, percent
3.5

3.0
Africa and Middle East
2.5
Latin America
2.0 Europe and Central Asia

1.5 Japan
Emerging Asia (excl. China)
1.0
China
0.5 Other Advanced Economies
0.0 Euro Area
United States
–0.5
World Growth Rate
–1.0

–1.5
2012 2013 2014 2015

Source: CPB Netherlands Bureau of Economic Policy Analysis.

Note: Seasonally adjusted data.

Two mutually-reinforcing factors appear to drive weak import demand in emerging economies: lower
commodity prices and China’s transition to a new growth path.

• Prices of commodities, particularly fuels, experienced a large decline starting in mid-2014

(Figure 6). As a result, exporters in Africa, the Middle East, Eastern Europe and Central Asia, and
South America did experience a fall in trade values, even though trade volumes did not decline. This
evidence indicates the important role of enhanced supply, especially in fuels—though expectations
of lower demand may also matter. The deterioration in the terms of trade of commodity producers
has hurt their real incomes and contributed to the recessions in countries such as Brazil and the
Russian Federation, leading to a further contraction in their import volumes. That, in turn, has had
an adverse impact also on China’s exports.

4
  The aggregate for “Emerging Asia” is based on data reported by the following countries: Hong Kong, Special
Administrative Region of the People’s Republic of China; People’s Republic of China; India; Indonesia; Republic
of Korea; Malaysia; Philippines; Singapore; Taiwan, China; Thailand and Vietnam.

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 Figure 6:  Values, Volumes and Prices of World Merchandise Exports, 2010–2015

World Exports: 3-month moving average, index (Jan. 2012 = 100) Prices: index (Jan. 2010 = 100)

115 170 200

180
110 150
160
105 130 140

110 120
100
100
95 90
80

90 70 60
40
85 50
20
80 30 0
2012 2013 2014 2015 2010 2011 2012 2013 2014 2015

Volume Value Price Fuels Non fuel commodities Manufacturing

Source: CPB Netherlands Bureau of Economic Policy Analysis.

Note: Seasonally adjusted data.

• Trade developments in 2015 also reflected China’s transition to a new, slower growth path that
is less dependent on investment and industrial production. The changes in the Chinese economy
contributed to weak global import demand. If China’s imports had not fallen in 2015, world
merchandise import volume growth would have been 2.1 percent rather than the actual 1.7 percent;
if China’s imports had grown at the 2014 rate, then the world import growth would have been
2.6 percent.5 Changes in China, however, also have longer-term structural aspects that are affecting
the pattern of production and trade in East Asia and beyond and are manifested in changes in
manufacturing, commodities, and services. Both these short-term and long-term aspects are
analyzed in detail in the next section.

Structural factors that continue to contribute to the trade slowdown include a slower pace of trade
liberalization and the maturation of global value chains. First, changes in international vertical
specialization underlie the slowdown in world trade. The long-run trade elasticity increased during
the long 1990s as production fragmented internationally into global value chains, leading to a rapid
surge in trade in parts and components, and decreased in the 2000s as this process matured. Second,
the dearth of trade reforms and the gradual buildup of protectionist measures may be structural factors
that explain the slowdown in global trade growth. In particular, the slower pace of trade liberalization
in the 2000s relative to the 1990s may have contributed to the lower trade elasticity.6

5
  There are two caveats. First, these numbers are based on a standard comparative statics exercise, which assumes
that import growth in the rest of the world remained unchanged. Second, there is some uncertainty on the
preliminary numbers for 2015. This reflects the fact that high frequency value data often need to be revised, as well
as the difficulties in correctly estimating trade in volume terms from trade value data. Using different data sources,
however, only affects the magnitude of China’s contribution to a weakening global import demand, not its direction.
6
  For a collection of studies on the structural and cyclical determinants of the trade slowdown, see Hoekman (2015).

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 References
Constantinescu, Cristina, Aaditya Mattoo, and Michele Ruta. 2015. “The Global Trade Slowdown:
Cyclical or Structural?” World Bank Policy Research Working Paper, WPS 7158. Washington, DC.

Hoekman, Bernard. 2015. The Global Trade Slowdown: A New Normal? VoxEU.org e-Book. London:
Centre for Economic Policy Research.

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 Appendix
Figure A1
Merchandise Export Volume Merchandise Import Volume
(3-Month Moving Average, Jan. 2012 = 100) (3-Month Moving Average, Jan. 2012 = 100)

130 130
125 125
120 120
115 115
110 110
105 105
100 100
95 95
90 90
2012 2013 2014 2015 2012 2013 2014 2015

World World
Advanced Economies (47%) Advanced Economies (51%)
Emerging Market and Developing Economies (53%) Emerging Market and Developing Economies (49%)

130 130
125 125
120 120
115 115
110 110
105 105
100 100
95 95
90 90
2012 2013 2014 2015 2012 2013 2014 2015

United States (9%) Euro Area (25%) United States (13%) Euro Area (23%)
Japan (4%) Other advanced economies (11%) Japan (4%) Other advanced economies (11%)

160 160

150 150

140 140

130 130

120 120

110 110

100 100

90 90
2012 2013 2014 2015 2012 2013 2014 2015

Latin America (5%) Africa and Middle East (9%) Latin America (6%) Africa and Middle East (7%)
Europe and Central Asia (8%) Emerging Asia (27%) Europe and Central Asia (7%) Emerging Asia (26%)

Sources: CPB Netherlands Bureau of Economic Policy Analysis, WTO.

Note: Seasonally adjusted data. In parentheses: share in world trade values in 2014. Group composition in Data Notes.

1611579_Global_Trade_Watch.indd 9 3/8/16 1:47 PM

 Figure A2
Merchandise Export Value Merchandise Import Value
(3-Month Moving Average, Jan. 2012 = 100) (3-Month Moving Average, Jan. 2012 = 100)

120 120

110 110

100 100

90 90

80 80

70 70

60 60
2012 2013 2014 2015 2012 2013 2014 2015

World World
Advanced Economies (47%) Advanced Economies (51%)
Emerging Market and Developing Economies (53%) Emerging Market and Developing Economies (49%)

130 130

120 120

110 110

100 100

90 90

80 80

70 70

60 60
2012 2013 2014 2015 2012 2013 2014 2015

United States (9%) Euro Area (25%) United States (13%) Euro Area (23%)
Japan (4%) Other advanced economies (11%) Japan (4%) Other advanced economies (11%)

130 130

120 120

110 110

100 100

90 90

80 80

70 70

60 60
2012 2013 2014 2015 2012 2013 2014 2015

Latin America (5%) Africa and Middle East (9%) Latin America (6%) Africa and Middle East (7%)
Europe and Central Asia (8%) Emerging Asia (27%) Europe and Central Asia (7%) Emerging Asia (26%)

Sources: CPB Netherlands Bureau of Economic Policy Analysis, WTO.

Note: Seasonally adjusted data. In parentheses: share in world trade values in 2014. Group composition in Data Notes.

10

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 A Closer Look at Trade Spillovers from China’s Rebalancing
1. China’s transition to a new, slower growth path that is less dependent on investment and
industrial production, along with the weaker external demand for its exports, was a factor
behind trade developments in 2015.

The behavior of trade reflects to an extent the contraction and rebound in Chinese gross domestic
product (GDP) growth in 2015, which was concentrated in industrial production. Chinese GDP growth
slowed down in the first quarter of 2015 and subsequently rebounded (Figure 7). This pattern was
more marked for industrial output. In the first half of 2015, China saw a contraction in import volumes
of 15 percent in annualized terms and was responsible for more than half of the downward pull on
world imports. The reversal of these trends in the second half of 2015 is contributing to the rebound
that we observe in world trade: China’s imports grew by an annualized 11 percent contributing to one-
third of the increase in world growth (Figure 8).

Figure 7:  China’s GDP, Industrial Production and Merchandise Trade Indexes
(percent change, q/q annualized)
14.00 60.00

12.00 40.00

10.00 20.00

8.00 0.00

6.00 –20.00

4.00 –40.00

2.00 –60.00

0.00 –80.00
2012Q1

2012Q2

2012Q3

2012Q4

2013Q1

2013Q2

2013Q3

2013Q4

2014Q1

2014Q2

2014Q3

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

Real GDP Industrial Production, const. U.S. dollars

Export Volume (rhs) Import Volume (rhs)

Sources: World Bank Global Economic Monitor and Haver Analytics.

Note: Seasonally adjusted data.

• Several factors magnified the impact of changes in China’s GDP on imports. First, on the production
side, the slowdown in GDP is concentrated in the industrial sector, which depends to a larger extent
on imported inputs than other sectors of the economy—imported inputs are 11.5 percent of total
inputs in the industrial sector and only about 6 percent in other sectors (see Appendix Figure A3).
Second, on the demand side, we are beginning to see a decline in the share of investment, which
draws in more imports than other components of aggregate demand. The import intensity of China’s
investment (though declining) is more than 50 percent higher than the import intensity of consumption.

11

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 Figure 8:  Growth in Merchandise Import Volumes in the First Half and Second Half of 2015:
Contributing Regions, percent
2.5
2
1.5
1
0.5
0
–0.5
–1
–1.5
–2

Jan–Jun 2015 vs. Jul–Dec 2014 Jul–Dec 2015 vs. Jan–Jun 2015

United States Euro Area Other advanced economies Emerging Asia (excl. China)

Japan Europe and Central Asia Latin America Africa and Middle East

China World growth rate

Source: CPB Netherlands Bureau of Economic Policy Analysis.

Note: Seasonally adjusted data.

Investment-related imports account for almost 60 percent of China’s total imports, and for
11 percent of the world investment-related imports (second only to the United States). Third,
the contractionary impact on overall trade may have been magnified because both industrial
production and investment are strongly linked to international supply chains. Finally, GDP changes
may amplify trade effects through inventory adjustments—that is, firms run down and then rebuild
inventories in response to negative shocks, particularly along the supply chain.

• The pattern of exports affected, and was affected by, Chinese GDP and industrial production. The
poor performance of Chinese exports in 2015 primarily reflected weak external demand, especially
in emerging economies. For example, nearly a quarter of the decline in exports was attributable
to contractions in Russia and Central Asia, which have been hit by the commodity price decline
(Figure 9). In addition, changes in competitiveness of the Chinese economy, as reflected in variations
in the real effective exchange rate (REER), as well as other determinants of competitiveness such as
real wages, have affected exports, and hence domestic output (Figure 10). For instance, the REER
increased sharply in the second half of 2014, remained broadly stable until mid-2015, and seems
to have been declining since July 2015, following a depreciation of the renminbi relative to the
U.S. dollar. Second, the slowdown in Chinese GDP may have adversely affected the exports of
intermediate goods that are eventually reimported as parts of final goods produced abroad to meet
China’s demand.

12

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 Figure 9:  Merchandise Export Values of China: Contributions to Growth
(2015: Jan–Oct versus 2014: Jan–Oct), by Destination Country, percent
China's export growth, 2015:Jan–Oct vs. 2014:Jan–Oct –0.68
Hong Kong, SAR –1.38
Russia –0.74
Japan –0.51
Iran –0.25
Brazil –0.23
Euro Area (other) –0.20
Kazakhstan –0.15
Netherlands –0.15
Indonesia –0.12
Germany –0.12
Eastern Europe and Central Asia (other) –0.12
Finland –0.08
Other 0.03
Africa and the Middle East (other) 0.29
Latin America and the Caribbean (other) 0.35
South Asia 0.45
Advanced economies (other) 0.45
East Asia (other) 0.72
United States 1.09

Source: IMF Direction of Trade Statistics.

Note: The first 10 individual countries with largest negative contributions are plotted separately from regional
aggregates.

Figure 10:  China’s exchange rate, 2013–15

125 0.168

0.166
120
0.164
115 0.162

0.160
110
0.158
105
0.156

100 0.154

0.152
95
0.150

90 0.148
Jan-13 Jun-13 Nov-13 Apr-14 Sep-14 Feb-15 Jul-15 Dec-15

Real Effective Exchange Rate (REER), Jan. 2013 = 100

Nominal Effective Exchange Rate (NEER), Jan. 2013 = 100
Exchange rate USD/LCU (rhs, increase = appreciation)

Source: World Bank Global Economic Monitor.

13

1611579_Global_Trade_Watch.indd 13 3/8/16 1:47 PM

 The contraction in China’s imports affected other regions of the world.7 Countries more exposed to
China, as measured by China’s share in their total exports, tended to see a greater contraction in the
value of their exports in the first three quarters of 2015 compared with the corresponding period
in 2014 (see Figure 11). A 1 percent higher exposure meant a 0.3 percent greater contraction in the
growth of export values.8 The impact on exports to China from different countries was negatively
related to the share in their exports of intermediate goods and fuels, positively related to the share of
consumption goods, and not sensitive at this stage to the share of capital goods (Appendix Figure A4).
Furthermore, the reduction in value of exports was attributable to lower prices and lower quantities to
an extent that varied across regions, depending on the composition of their exports. The slower growth
in imports from large commodity exporters, such as those in the Middle East and Sub-Saharan Africa,
reflected the recent drop in prices, while the sizable contraction in imports from Emerging Asia,
especially in the first quarter of 2015, was to a larger extent the result of a reduction in quantities.

Figure 11: Exposure to China and Contraction of Merchandise Exports

(2015: January–September versus 2014: January–September)
20
VNM
10
Jan–Sep 2015 relative to Jan–Sep 2014, percent
Growth in total merchandise export values,

0 IRL
BHR
MEX
ZAF PHL
USA KOR
POL ISR ARG MYS JPN
–10 TUR
HUN
CZE
SVK
PRTFRA
ROU DEU IDN
ESP CAN
ITA
DNK CHL
AUT
NLD
BEL SWE
IND SGP PER
ARE BRANZL
–20 FIN
AUS
IRN OMN
NOR
BLR COL
–30 VEN
UKRRUS
SAU IRQ
QATKWT
–40 NGA
AGO
DZA
–50 KAZ

–60
0 10 20 30 40 50 60
Exposure to China (share of exports to China in country's total exports, 2014, percent)

Source: IMF Direction of Trade Statistics.

Note: Sixty largest world exporters, excluding Switzerland and Hong Kong, SAR.

7
  For a broader discussion of spillovers (trade, investment, financial) from a growth decline in China, see World
Bank (2016b). Several studies look at spillover effects on specific regions such as East Asia and the Pacific
(World Bank 2016a) and Sub-Saharan Africa (Lakatos and others 2016).
8
  Figure A5 in the appendix shows the extent to which different countries of origin accounted for the contraction
in the value of China’s imports.

14

1611579_Global_Trade_Watch.indd 14 3/8/16 1:47 PM

 2. The short-term impact on manufacturing was most visible in East Asia, which experienced
a regional trade contraction in the first half of 2015 and is now beginning to see a rebound.
Since the slowdown was concentrated in the industrial sector, which is both more import-
intensive and more strongly linked to international value chains than other sectors of the
economy, the impact on trade was magnified. In the longer term, the scope for recovery will
be affected by a number of factors with contrasting effects.

The contraction and rebound in Emerging Asia’s merchandise exports primarily reflected a change in
volumes rather than prices (Figure 12). A large fraction of Emerging Asia’s exports are manufactured
products, which have more stable prices than commodities. However, even within Emerging Asia,
countries such as Indonesia have a relatively large share of commodities in their export basket and saw
significant export price declines.9

Figure 12:  Merchandise Exports of Emerging Asia: Value, Volume, and Price
(3-month moving average, January 2012 = 100)
125

120

115

110

105

100

95

90

85

80
2012 2013 2014 2015

Volume Value Price

Source: CPB Netherlands Bureau of Economic Policy Analysis.

Note: Seasonally adjusted data.

China is important as the ultimate destination for both the gross and value added exports of a number
of East Asian countries. Data available (at this stage, only until 2011) for selected countries reveal that
not only does China account for a significant share of the gross exports of East Asian economies, it
also is the ultimate destination of a large part of their value added exports. For Taiwan, China, Japan,
Indonesia, and the Republic of Korea, around 50 percent of gross exports to China consists of value
added ultimately absorbed in China, and therefore only dependent on Chinese demand (Figure 13).

9
  The World Bank database on Measuring Export Competitiveness (MEC) is a useful tool to further decompose
exports along several dimensions beyond values and volumes, such as product composition and destination. The
database can be accessed at http://mec.worldbank.org/

15

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 Another 20 percent of the regional exports are re-exported by China and consumed in third countries,
and therefore not dependent on China’s demand. The remainder constitutes foreign value added in
a particular country’s gross exports to China, which originates in other countries in the region and
outside. This last segment is larger for countries such as Korea and Taiwan, China, which rely more on
imported inputs, and smaller for economies such as Japan, which is mostly an upstream producer of
industrial goods, and Indonesia, which mostly exports commodities to China.

Figure 13:  Share of China in Gross Exports of Goods and Services of Selected Countries
by Source of Value Added (percent of total exports)
0 10 20 30 40 50 60 70 80 90 100
AUS
TWN, CHN
JPN
IDN
KOR
BRA
RUS
USA
FIN
CAN
IND
SWE
DEU Value added exports to China, absorbed in China (intermediates)
AUT
Value added exports to China, absorbed in China (final goods)
ITA
NLD Value added exports to China, not absorbed in China
FRA Foreign and returning value added in exports to China
DNK Gross exports to other countries
GBR
BEL
Other

Source: World Input Output Database, 2011.

The impact of changes in China’s demand on regional trade were magnified by value chain linkages.
As noted above, the changing composition of Chinese production may have magnified the trade impact
as production shifted away from sectors that are associated with global value chains—that is, from
industrial production to services, and within industrial production from capital goods to consumption
goods. Given the relative intensity of regional value chains in East Asia (Figure 14), this magnification
effect is likely to have impacted intra-regional trade flows more than inter-regional trade (Appendix
Figure A6).

South Asia felt a less severe direct impact of developments in China than did other regions.
The merchandise exports of Bangladesh, Pakistan, and Sri Lanka continued to grow, buoyed by
positive developments in the United States and parts of the Euro Area (Figure 15). Among other
factors, an adverse effect of the import contraction in China was felt primarily by India. For India,
markets in the Middle East are more important than those in China, and so it suffered export
contraction as much as a consequence of the downturn in exports to the Middle East (particularly
the United Arab Emirates) affected by the fall in commodity prices as it did from lower direct
exports to China.

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 Figure 14:  The Sources of Imported Inputs of Goods and Services: A Comparison of Selected
Countries in Asia and the Rest of the World
Inputs of goods and services from abroad by source, 2011
(percent of total input from abroad)

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
BRN
CHN
HKG
IDN
IND
JPN
KHM
KOR
MYS
PHL
SGP
THA
TWN, CHN
VNM

ARG
AUS
BRA
CAN
CHE
CHL
COL
CRI
EU28
ISL
ISR
MEX
NOR
NZL
RUS
SAU
TUN
TUR
USA
ZAF
China Asia Rest of the world

Source: OECD Inter-Country Input-Output (ICIO) Tables, edition 2015.

Note: Data are based on gross exports statistics, hence inputs labelled “Asia” and “China” may include
re-exports from non-Asian countries.

Figure 15: Merchandise Exports of South Asia: Contributions to Growth by Destination

Country
India's Merchandise Export Values: Contributions to Growth (y/y), Bangladesh, Pakistan, Sri Lanka: Merchandise Export Values:
by destination (percent) Contributions to Growth (y/y), by destination (percent)

15 14
10 12
10
5
8
0 6
–5 4
2
–10
0
–15
–2
–20 –4
Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15

United States Euro Area Other advanced

Japan China Emerging Asia (excl. China)
Africa and the Middle East Europe and Central Asia Latin America
South Asia India

Source: IMF Direction of Trade Statistics.

Note: Quarterly data.

17

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 In the longer term, the scope for trade growth in manufacturing will be affected by a number of
factors with contrasting effects. On the one hand, trade growth may be limited by diminished growth
in demand in China. On the other hand, the gradual rebalancing from investment to consumption is
likely to create opportunities for exporters of final goods—evidence of which is already emerging
(Figure A4), and it may also eventually boost upstream intermediate and capital goods sectors that
are now adversely affected. Furthermore, increasing real wages in China may encourage relocation of
production toward other lower-cost economies.10

3. While developments in commodity markets are influenced by exogenous factors, such as

the glut in fuels, China’s transition is also having an impact on commodity exporters. China
accounts for 13 percent of world commodity imports with peaks of 40 percent for certain
metals (Figure 16). The fact that commodity exporters are seeing lower commodity prices rather
than declining export volumes indicates that enhanced supply is an important factor—though
expectations of lower future demand may also be playing a role.

Figure 16:  Share of China in World Commodity Imports, by Type, percent

50

45
43.7
41.8
40 40.2 40.1 40.0
38.9
35

30

25

20

15
12.2 12.6 12.9
10

0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

All commodities (SITC3 0+1+2+3+4+68) Fuel (SITC3 3)

Non-ferrous metal (SITC3 68) Metal ores and metal scrap (SITC3 28)

Source: UN Comtrade (via WITS).

Africa and the Middle East

Having experienced a deep plunge in export values since mid-2014, Africa and the Middle East
contributed significantly to the recent decline in world trade values. This was mostly a nominal
phenomenon (Figure 17). The downturn in oil and commodity exports also reflects sluggish volume
growth in recent years, which can be explained by factors such as depressed global demand (Figure 18).
China and other Emerging Asian countries together account for more than half of the decline in export

  The extent of this effect is itself difficult to assess. The reason is that, alongside cross-border relocation of
10

production, there is scope for relocation within China. For a discussion and key references, see Gaulier and
others (2015).

18

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 values of Africa and the Middle East. The recent pickup in exported volumes may reflect the gains in
competitiveness from lower prices, although this was not sufficient to avoid the revenue losses.

Figure 17:  Merchandise Exports of Africa and the Middle East: Value, Volume and Price
(3-month moving average, January 2012 = 100)
160

140

120

100

80

60

40
2012 2013 2014 2015

Volume Value Price

Source: CPB Netherlands Bureau of Economic Policy Analysis.

Note: Seasonally adjusted data.

Figure 18:  Contributions to Growth in Merchandise Exports of the Middle East

and Sub-Saharan Africa by Destination Country
Middle East and North Africa Merchandise Export Sub-Saharan Africa Merchandise Export
Values: Contributions to Growth (y/y), by destination Values: Contributions to Growth (y/y), by destination
(percent) (percent)

5 10
0 5
–5 0
–10
–5
–15
–10
–20
–25 –15
–30 –20
–35 –25
–40 –30
Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15

United States Euro Area

Other advanced Japan
China Emerging Asia (excl. China)
MENA Europe and Central Asia
Latin America Sub-Saharan Africa

Source: IMF Direction of Trade Statistics.

Note: Quarterly data.

19

1611579_Global_Trade_Watch.indd 19 3/8/16 1:47 PM

 Latin America
Volume data for Latin America and the Caribbean also do not appear to mirror the downturn seen in
export values (Figure 19). The drop in export values for Latin America and the Caribbean as a whole is
indeed milder: less than 10 percent, relative to 25–30 percent for Africa and the Middle East. However,
there is an interesting difference between Central America and the Caribbean, which are more oriented
toward the United States, and South America, which is vulnerable to developments in East Asia
(Figure 20). Even though exports of South America fell by nearly 20 percent, the overall outcome
for Latin America and the Caribbean is less gloomy because of the dominance of Mexico, which
accounted for 37 percent of Latin America’s exports in 2014, and mainly exports to a strengthening
U.S. economy.

Figure 19:  Merchandise Exports of Latin America and the Caribbean: Value, Volume
and Price (3-month moving average, January 2012 = 100)
130

120

110

100

90

80

70

60

50
2012 2013 2014 2015

Volume Value Price

Source: CPB Netherlands Bureau of Economic Policy Anaylsis.

Note: Seasonally adjusted data.

Eastern Europe and Central Asia

Recent dynamics in value export data for this region are dominated by commodity exporters, including,
but not limited to, Russia, which accounts for more than a quarter of the region’s trade (Figure 21).
The region as a whole was only marginally affected by developments in China. The geopolitical
tensions surrounding Russia and Ukraine in 2015, and the associated spillovers to Commonwealth
of Independent States (CIS) countries, appear to have had a substantially more significant impact on
export volume growth in the region.

20

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 Figure 20:  Merchandise Exports of Latin America and the Caribbean: Contributions
to Growth by Destination Country
Central America and the Caribbean Merchandise Export Values: South America Merchandise Export Values: Contributions to
Contributions to Growth (y/y), by destination (percent) Growth (y/y), by destination (percent)

8 10
6 5
4
2 0
0 –5
–2
–10
–4
–6 –15
–8 –20
Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15

United States Euro Area

Other advanced Japan
China Emerging Asia (excl. China)
Africa and the Middle East Europe and Central Asia
Central America and the Caribbean South America

Source: IMF Direction of Trade Statistics.

Note: Quarterly data.

Figure 21:  Merchandise Exports of Eastern Europe and Central Asia: Value, Volume,
and Price and Contributions to Growth by Destination Country
Europe and Central Asia's Merchandise Exports, Europe and Central Asia's Merchandise Export Values:
3-month moving average, index (Jan. 2012 = 100) Contributions to Growth (y/y), by destination (percent)

130 10
120 5
110 0
100 –5

90 –10
–15
80
–20
70
–25
60 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15
50
2012 2013 2014 2015
United States Euro Area
Other advanced Japan
Volume Value Price China Emerging Asia (excl. China)
Africa and the Middle East Europe and Central Asia
Latin America

Sources: CPB Netherlands Bureau of Economic Policy Analysis, and IME Direction of Trade Statistics.
Notes: Seasonally adjusted data and quarterly data.

4. The rebalancing of the economy from investment to consumption is also shifting China’s
demand from goods to services. Part of this demand is being served by cross-border imports
and consumption abroad—growth in these areas is already visible—although more time and
data will need to be assessed if these trends are durable.

The rebalancing of the economy from investment to consumption affects the level and composition
of trade. Rebalancing in China involves a shift from investment to consumption and, therefore, also
in demand from goods to services. Available data indeed show the different dynamics of goods and

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 services imports in recent years, with slowing imports of goods and rising services imports, especially
travel (Figure 22). The latter may reflect consumption abroad of services ranging from tourism to
education and health; although it is also possible that these data capture other short-term factors such
as disguised capital outflows.

While services imports are growing, goods trade developments continue to dominate. The net effect,
however, is still largely dominated by the negative developments in imports of goods, as services
accounted for a relatively small share of total imports of China in 2014. But the share of services has
grown—from around 15 percent at the beginning of 2011 to close to 22 percent in the first half of 2015.

Figure 22:  China’s Import Values of Goods and Services (Indexes)

China: Imports of goods and services, billion USD

(index 2011Q1 = 100) China: Share of services in total imports (percent)
180 24
170
160 22
150 20
140 18
130
120 16
110 14
100
90 12
80 10
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2

2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
Services imports
Goods imports

China: Services imports, by type (2011Q1 = 100) China: Services imports, by type, billion US dollars
400 120
350
100
300
80
250
60
200
150 40
100 20
50 0
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2

2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2

Services Other services Travel, debit, US dollars

Transport, debit, US dollars
Transport Travel
Other services, debit, US dollars
Goods

Source: IMF Balance of Payments Statistics.

22

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 5. Looking ahead, the rebalancing of the Chinese economy will influence trends in world trade,
but how the transition happens will affect the extent of trade fluctuations.

Lower growth in China, as well as the gradual shift away from industrial production and investment,
is affecting all regions of the world. Recent experience suggests that how rebalancing takes place is
likely to affect how much global trade fluctuates in the transitional period. The trade consequences of
rebalancing are also likely to have positive aspects. The changing composition in demand may well
favor exporters of consumption goods and eventually of upstream intermediate and capital goods used
in their production. In the longer term, rising wages in China may encourage industrial production
and exports in lower-cost economies. The rebalancing is also shifting China’s demand from goods to
services, and services imports may grow even faster if services markets become more open.

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 References
Gaulier, Guillaume, Gianluca Santoni, Daria Taglioni, and Soledad Zignago. 2015. “The Power of the
Few in Determining Trade Accelerations and Slowdowns.” In The Global Trade Slowdown: A New
Normal?, ed. B. Hoekman. VoxEU.org e-Book. London: Centre for Economic Policy Research.

Lakatos, Csilla, Maryla Maliszewska, Israel Osorio-Rodarte, and Delfin Go. 2016. “China’s Slowdown
and Rebalancing: Potential Growth and Poverty Impacts on Sub-Saharan Africa.” Photocopy, World
Bank, Washington, DC.

World Bank. 2016a. Global Economic Prospects: Regional Integration and Spillovers. World Bank:
Washington, DC.

———. (2016b) “Who Catches a Cold When Emerging Markets Sneeze.” In Global Economic
Prospects: Regional Integration and Spillovers. World Bank: Washington, DC.

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1611579_Global_Trade_Watch.indd 24 3/8/16 1:47 PM

1611579_Global_Trade_Watch.indd 25
Figure A3:  China’s GDP Components, by Type of Expenditure and Sector: Share in Total GDP and Import Intensity
China: GDP components, by type of expenditure (percent of GDP) China: GDP components, by sector
(percent of GDP)

70
55
60 50

50 45
40
40
35
30 30

2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013

2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Investment Consumption Industry Tertiary

China: Import intensity of GDP components,

25
China: Import intensity of GDP components,
by type of expenditure (percent) by sector (percent)
14
Appendix

20
12
16
10
8 12

6 8
4 4
2 0
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011

2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011

Consumption Investment Industry Tertiary

Note: Computed as the share of imported intermediates in total

intermediates used to produce value added in a sector.
Source: World Input Output Database, OECD, China Statistical Yearbook, 2014.

3/8/16 1:47 PM
1611579_Global_Trade_Watch.indd 26
Figure A4:  Contraction of Exports to China, by Type of Exports

capital goods consumer goods

VNM
VNM

40
BLR

40
BLR
GBR
GBR

20

20
MYS SVN
ARG
ARG MYS SVN

UKR
UKR PRT

0
PRT DNK
ISR

0
DNK PER FRA
PER ISR FRA ZAFKOR USA
ZAF USA KOR CZE
THA IRL
IRL THA
SGP CZE BHR SGP CHL SVK
CHL
BHR SVK POL ESP
POL ESP AUT CAN NLDAUT SWE
CAN NLD SWE IDN
IDN ROU JPN HUN DEU
ROU HUN JPN BRA BEL
ITA
BEL ITADEU FIN TUR
BRA TUR FIN PHL
PHL MEX

-20
MEX

-20
IND
IND AUS
AUS
ARE
ARE NZL
NZL

IRN

-40
IRN

-40
Jan-Sep 2015 vs. Jan-Sep 2014 (percent)

Jan-Sep 2015 vs. Jan-Sep 2014 (percent)

0 10 20 30 40 0 20 40 60 80
Share of consumer goods in merchandise exports to China, 2014 (percent)

Growth in merchandise export values to China.

Growth in merchandise export values to China.

Share of capital goods in merchandise exports to China, 2014 (percent)

26
intermediates fuels
VNM VNM

40

40
BLR
GBR
GBR
20
SVN
ARG
MYS

20
SVN MYS ARG UKR
PRT
0

DNK
ISR
FRA NOR
USA
KORZAF
CZE
THA
SGP
IRL
SVK
UKR POL
AUT
SWEESP
NLD CAN IDN

0
PRT DNK
ISR ROU
HUN
JPN
DEU
FRA PER BEL
ITA
TUR BRA
USA
KOR ZAF FIN PHL
CZE THA MEX
-20

SVK IRL SGP CHL BHR

AUT POL IND AUS RUS
SWE ESPNLD CAN
IDN
HUN JPN ROU NZL
ITA DEU BEL BRA
TUR
PHL FIN
IRN OMN
-40

MEX

-20
IND KAZ
AUS NGA
ARE
NZL
QAT
-60

COL
IRN

-40
DZA

Jan-Sep 2015 vs. Jan-Sep 2014 (percent)

Jan-Sep 2015 vs. Jan-Sep 2014 (percent)

0 20 40 60 80 100 0 20 40 60 80 100

Growth in merchandise export values to China.

Growth in merchandise export values to China.

Share of intermediates in merchandise exports to China, 2014 (percent) Share of fuels in merchandise exports to China, 2014 (percent)

Sources: IMF Direction of Trade and UN Comtrade.

Note: Sixty world largest exporters.

3/8/16 1:47 PM
 Figure A5:  Contributions to Growth in China’s Merchandise Imports by Country of Origin
(year-on-year growth, percent)
10

–5

–10

–15

–20

–25
Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15

United States Euro Area Other advanced economies Switzerland

Africa and the Middle East Europe and Central Asia Latin America Australia
Japan China Hong Kong Indonesia
Korea Malaysia Philippines Singapore
Taiwan, China Thailand Vietnam South Asia

Source: IMF Direction of Trade Statistics.

Figure A6:  Contributions to Growth in Emerging East Asia’s Merchandise Exports by Destination
(year-on-year growth, percent)
10
8
6
4
2
0
–2
–4
–6
–8
Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15

United States Euro Area Other advanced economies

Japan Emerging East Asia Africa and the Middle East
Europe and Central Asia Latin America South Asia

Source: IMF Direction of Trade Statistics.

Note: Quarterly data.

27

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 Data Notes
With two exceptions explained below, group country composition follows the one used in the World
Trade Monitor issued by the CPB Netherlands Bureau of Economic Policy and Analysis.

Advanced Economies: United States, Japan, Euro Area, and other advanced economies.

Euro Area: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy,
Luxembourg, Malta, Netherlands, Portugal, Slovak Republic, Slovenia, Spain.

Other advanced economies: Australia, Canada, Denmark, Iceland, New Zealand, Norway, Sweden,
Switzerland, United Kingdom.

Emerging and Developing Economies: Emerging Asia, Europe and Central Asia, Latin America and
the Caribbean, Africa and the Middle East.

Emerging Asia: Hong Kong SAR, China, India, Indonesia, Republic of Korea, Malaysia, Philippines,
Singapore, Taiwan, China, Thailand, Vietnam.

Europe and Central Asia: Belarus, Bulgaria, Croatia, Czech Republic, Hungary, Kazakhstan, Latvia,
Lithuania, FYR Macedonia, Poland, Romania, Russian Federation, Turkey, Ukraine.

Latin America and the Caribbean: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica,
Dominican Republic, Ecuador, Guatemala, Mexico, Paraguay, Peru, Uruguay.

Africa and the Middle East: Algeria, Egypt, Islamic Republic of Iran, Iraq, Israel, Kenya, Kuwait,
Morocco, Oman, Qatar, Saudi Arabia, South Africa, Tanzania, United Arab Emirates, Zambia.

Country composition for the Sub-Saharan Africa group in Figure 18: Angola, Benin, Botswana,
Burkina Faso, Burundi, Cameroon, Cape Verde, Central African Republic, Ivory Coast, Equatorial
Guinea, Ethiopia, Gabon, Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho, Madagascar,
Malawi, Mauritius, Mozambique, Namibia, Niger, Nigeria, Rwanda, Seychelles, Sierra Leone, South
Africa, Sudan, Tanzania, Uganda, Zambia, Zimbabwe.

Country composition for the South Asia group in Figure 9 and Figures A5 and A6: Bangladesh,
India, Pakistan, Sri Lanka.

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