Chinese markets were closed today (and Friday is also a public holiday) as a massive military parade in Beijing aimed at "rekindling the glorious past of forces led by the Communist Party of China (CPC) in defeating Japanese invaders in World War II," according to official media — the United States defeated Japan and within China the nationalist government of the Republic of China also played a significant part.


President Xi Jinping said in a speech at Thursday's parade that upholding world peace is a noble mission for the People's Liberation Army (PLA) of China and according to Xinhua, the official news agency, he announced that the number of its troops would be cut by 300,000 from 2.3m, with the army taking up "the least proportion in the country's history."

The president didn't refer to current economic woes but noted that there is unfinished work: "As an ancient Chinese saying goes, 'After making a good start, we should ensure that the cause achieves fruition.' The great renewal of the Chinese nation requires the dedicated efforts of one generation after another. Having created a splendid civilization of over 5,000 years, the Chinese nation will certainly usher in an even brighter future."

The exposure of countries to the Chinese economy as measured by the ratio of a country's merchandise exports in 2013 that go to China, has been prepared by economists at the Peterson Institute for International Economics, a Washington DC think-tank. Paolo Mauro, the lead economist, previously worked at the IMF for 20 years.

The economists say that the recent drop in China’s stock prices has rekindled interest in the economic impact of a possible slowdown in China’s economic growth. China is now the second largest importer worldwide (closely following the United States), "international trade is an important channel through which the Chinese economy can sway growth elsewhere."

The first chart here is of the other 18 countries of the 19 member countries of the G-20 — the world's leading 19 advanced and emerging economies.

The economists write: "Among the G-20 countries, regional neighbors had some of the largest ratios of exports to China in total exports (Australia, Korea, Japan). Commodity exporters also featured prominently (Brazil, Saudi Arabia). Except for India and Argentina, the trade exposure to China has increased in all G-20 economies since 2007."

Australia is in the lead at 36.1%, up from 14.2% in 2007. Germany has a ratio of 5.4% up from 3.1% in 2007. Japan had an exposure of 18.1% in 2013.

The exposure of the rest of the world is headed by Mongolia at 90.4% and several African countries exceed 30%.

Exposure to China - charts

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Caption of Xinhua pic above: "Foot formations march through the Tian'anmen Square during a parade in Beijing, capital of China, Sept. 3, 2015. China on Thursday held commemoration activities, including a grand military parade, to mark the 70th anniversary of the victory of the Chinese People's War of Resistance Against Japanese Aggression and the World Anti-Fascist War."