As the world's second biggest economy, China is a mainstay for several countries who depend on it for their international services. Most of these tend to be neighboring countries on the same continent, but China's influence is not limited to Asia alone. With major business also being done in Australia and North America, China has proved that its reach is global. As a result, the impact of its attempt to rebalance its markets and economy will not stay within its borders, and will most likely affect economic policies everywhere.
A considerable number of nations depend heavily on exports to China; after all, it is the world's second-biggest importer, right behind the United States. These exports account for more than 4% of the GDP of certain nations, including Taiwan, Malaysia, and Singapore. However, certain exported products have not been doing as well as hoped, with prices and sales of these goods decreasing in China. Part of this can be attributed to the country's slowing economic growth, which has fallen by 2.5% in recent years. It is more likely, though, that it is due to China's rebalancing, as it is now importing more products for consumption purposes than for investment.
The effect of this is being seen almost everywhere. High demand for coal is forcing Indonesia to increase its coal production drastically in order to make sufficient exports to China. The same case is happening with milk from New Zealand and oil from the Persian Gulf. The price of coal from Indonesia has halved over the past three years because of an increase in supply due to increased exporting to China. Oil imports in the country are also surpassing those of the United States, making China the biggest importer of oil in the world. Its increasing dependence on oil from the Middle East could potentially affect political policymaking in the United States and India.
On the other hand, investment opportunities and commodity exports to China are decreasing, much to the chagrin of other nations. Australia, for example, is lamenting a potential loss of economic growth if investment opportunities with China keep up this trend. Many other countries are complaining that China's international business laws are acting harshly on foreign companies, making investment in the country much less welcome.
All in all, China has a tighter grip on the economies of other countries than most realize, and its rebalancing and decreasing investment policies could substantially impact the global economy. How else do you think China could potentially impact future economic and trade policy?