China behind global trade slowdown in 2015: World Bank

The slump in Chinese growth and its nascent economic transition was the key factor in a sharp slowdown last year in global trade, the World Bank said Wednesday.

Trade, as measured by total merchandise import volumes, rose only 1.7 percent in 2015, down from 3.0 percent in 2014, the Bank said in a new report.

That stall in trade, one of the key drivers of economic growth in recent years, was mostly due to cyclical shifts, especially the downturn in demand growth for commodities in emerging Asia and China.

But behind that slowdown is the beginning of China's transformation from an export-driven economy to one rooted more in domestic consumption.

Trade flows should continue to be volatile over the coming years, the report said, greatly determined by the pace of China's transformation.

"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," it said.

The World Bank also said that the plunge in commodity prices that has ravaged the economies of many exporters is less a problem of lower Chinese imports than of oversupply.

"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."