When I lived in Hong Kong in the 1990s, Asia was a place of great mood swings. Today is no exception, with pessimism fast on the rise, as I observed during a recent trip to the region. What a leading shipping magnate told me about sums it up: “There’s no fun anymore.” China’s debt-driven growth model is on the skids. An economic slowdown, a freezing up in trade and plunging markets and currencies are casting a shadow across Asia—and the globe. How worried should the developed world be? First, a little perspective. China’s slowing economic activity has been with us for some time—and is reflected in falling commodity prices and China-exposed equities. See the chart below. What’s new is global markets’ intensifying focus on China, enhanced by the U.S. Federal Reserve’s recent emphasis on Asia weakness.

How Worried Should We Be about China?

Market Realist – From the fastest-growing emerging market to casting a shadow over global growth, the Chinese economic story has indeed come a long way. Worries of an economic slowdown in China are rattling economies the world over. So much so, that the Fed held off on its rate hike in September, citing uncertainties in China as one of the primary reasons. China is a crucial piece of the global economic puzzle. A deceleration in China is bound to have effects all over the world.

How Worried Should We Be about China?

China (FXI) is the world’s largest exporter and the largest market for exports from some countries. The previous graph shows China’s (ASHR) share of global consumption for commodities like coal, oil (USO) (BNO), natural gas (UNG), platinum (PPLT), palladium (PALL), and gold (IAU). China consumes 54% of the world’s aluminum, 50% of the world’s thermal coal, 45% of the world’s steel, 30% of the world’s platinum, and 12% of the world’s oil. The slump in China is affecting global commodity prices. The S&P GSCI index (GSG) is now down 19.3% year-to-date.

How Worried Should We Be about China?

The previous graph shows the shares of exports of each country going to China in 4Q14. Latin American nations like Brazil and Chile are suffering from the slowdown in Chinese demand for their exports. 10% of Chile’s economy is made up of trade, and the slowdown in trade is affecting its growth outlook. BofA Merrill Lynch estimates that Chile will grow by only 1.8% in 2015 in contrast to its annual average growth rate of 4% over the past four years.

Luxury brands like Burberry (BURBY) and Louis Vuitton are taking a hit from the Chinese slowdown as well. Burberry’s revenues fell short of expectations in the first half of 2015, largely on account of a decline in sales in its Mainland China and the Asia-Pacific divisions. Sales in Hong Kong (EWH) fell by 20% in the last quarter. LVMH (LVMUY) has also warned that decline in demand from China is likely to hurt its flagship brand, Louis Vuitton. Other luxury fashion brands including Prada (PRDSY) and Coach (COH) are reeling from similar problems emanating from China.

So how worried should we be about China? We will do a SWOT (strengths, weakenesses, opportunities, and threats) analysis for the country in this series to find out the answers.