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Weak China growth could affect global monetary policy

Falling demand for commodities drives down prices, aggravating global deflationary drag.

PILE OF PROBLEMS: Iron ore being unloaded at a port in Shandong province. China's growth needs to pick up significantly for commodity prices to recover, but this is not going to happen under Beijing's new growth model, which emphasises improving growth quality through structural reforms at the expense of growth quantity.

THE global impact of a China economic slowdown is mainly transmitted through its trade links with the rest of the world, as its financial linkages remain limited. Most of the impact will come from China's commodity trade, which will have a far-reaching implication on global monetary policy.