The drop in the mainland equity market strikes a sombre tone, particularly in terms of the potential downside risks it poses to the economic growth in emerging markets. Analysts at Bank of America Merrill Lynch have run the numbers and found that not only has the world's second-largest economy been weighing on regional growth, but the drag has increased in 2014-15. The chart shows growth in emerging markets averaged across nine economies - Brazil, India, Indonesia, South Korea, Mexico, Poland, Russia, South Africa and Turkey. It shows that China was a significant growth driver between 2005 and 2008, but it has begun to weigh on growth since late 2013. "Over the past year, China likely accounted for more than a third of the 1.6-percentage-point emerging-market growth shortfall compared to its post-1998 average," the bank concludes.
