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When China Sneezes, These Countries Catch A Cold

When China Sneezes, These Countries Catch A Cold - SPDR S&P 500 ETF ETF:SPY, SPX

There is a popular saying in economics: When country X sneezes, country Y catches a cold. So, when China "sneezes," which countries are most prone to catching a "cold?"

According to Bloomberg, If China were to "sneeze" — either through a devaluation of its currency, a further slowdown in growth or the implementation of protectionist measures to protect China-based companies — Singapore would be most affected, followed by Taiwan, Vietnam, South Korea and Malaysia.

On the other hand, Indonesia, India and the Philippines are the most immune to a Chinese "sneeze."

Roughly 43 percent of all Chinese goods are destined to markets across Asia Pacific, including Australia and New Zealand, while the remaining 56 percent is destined to global markets in the rest of the world.

Despite close economic ties with its Asian neighbors, China is flexing its economic muscles, which poses dilemmas for its neighbors. China continues to pump money from its trove of cash into neighboring countries to export excess capacity in a move that can also be seen as boosting its "soft power."

As noted by Bloomberg, Asian countries find it difficult to balance their right to sovereignty without discouraging Chinese investors and spenders.

"That's a tough balancing act that's only going to get trickier as Chinese President Xi Jinping pursues his "China Dream" of increased economic and political clout," Bloomberg noted.

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