, european central bank ( 2016 ), hoekman ( 2015 ), organization for economic co - operation and development ( 2016 ), and lewis and monarch ( 2016 ). finally, of course, china looms large in any discussion of the global trade slowdown. not only is china ’ s trade being affected by all of the factors just discussed, but on - going structural changes within the chinese economy, including rebalancing toward domestic demand, are exerting an independent effect on world trade flows. so, let ’ s look next at china in more detail. 7 china after years of rapid export - led growth, china is now among the world ’ s leaders in both exports and imports. china ’ s exports now account for 14 percent of the world ’ s total, compared with only 4 percent 15 years ago. at the same time, china ’ s industrialization and export model has greatly increased its own demand for imports of raw materials, intermediate inputs, and parts and components. in recent years, however, growth in both chinese imports and chinese exports has slowed markedly. these developments have had a significant effect on global trade. one simple way to measure that effect is to consider what would have happened if china ’ s trade had not decelerated. as shown in slide 7, under a counterfactual in which china ’ s trade growth had not slowed relative to its gdp since 2011, global trade would still be growing as a share of gdp. 8 another explanation that has been put forward for much of the decline in world trade relative to world gdp is an increased weight of emes in the contribution to global growth together with the property that emes have lower income elasticities of trade than advanced economies do. ( see european central bank, 2016. ) however, more broadly, the literature does not seem to suggest that income elasticities are significantly lower for emes ( for example, lui and others, 2013 ). also, while trade financing constraints — another potential explanation — played some role during the severe trade slowdown during the global financial crisis, trade financing does not appear to have become more difficult since 2011 and likely has not been a significant factor in the slowdown in recent years. see lewis and monarch ( 2016 ) for more details. china has, of course, been subject to many of the forces i have already discussed. one notable trend, shown by the black line in slide 8, is that chinese processing exports - - that is, reexports from

to ensure the objectives are achieved. italy ’ s financial structure has many strong points. household wealth, net of debt, is nearly 2 times gdp, considering just the financial component, and about 5. 5 times gdp, including real estate. these levels are among the highest in the euro area, while the household debt ratio is among the lowest and that of firms is below the average. the net external debt position of the entire economy can be estimated at 15 per cent of gdp, one of the lowest values in the euro area, except for germany, which has a large credit position. the ratio of public debt to gdp declined by 18 percentage points between 1994 and 2007. in the last two years of recession it increased by 12 points, to stand at 115. 8 per cent. in the new market conditions action had to be taken even though the budgetary tightening adversely affects the prospects for economic recovery in the short term. competitiveness and growth in the monetary union stagnation, unemployment and, in the long run, budgetary strains are the inevitable consequence of the loss of competitiveness. the consolidation of the public finances needs to be accompanied by the revival of growth. in the ten years preceding the crisis hourly productivity rose by 3 per cent in italy, by 14 per cent in the euro area. in the same years the economy grew by 15 per cent in italy, as against 25 per cent in the euro area. italy ’ s employment rate remains low, 57 per cent in 2009, 7 percentage points less than in the euro area as a whole. the gap is wider for the young and reaches 12 points for women. on many other occasions we have addressed the question of structural reforms. the crisis makes them all the more urgent : the fall in gdp increases the burden of financing the public administration ; the costs imposed by tax evasion and corruption become even more unsustainable ; stagnation destroys human capital, especially among the young. the management of turnover in the public sector and the cuts in the discretionary expenditure of government departments recently decided by the council of ministers must provide the opportunity to rethink the scope and structure of government, rationalize resource allocation and reduce waste and duplication between different entities and levels of government. a reform plan covering the entire public sector is needed, to accompany the measures already adopted to raise the productivity of the public administration by evaluating the performance of managers and the results of individual units. fiscal federalism must enhance efficiency in the use of resources. only