The primary source of market fears that have driven the S&P 500 down 10.9 percent so far in 2016 is China’s weakening economy. In a new report, Goldman Sachs analyst Allison Nathan looked at how China fears have impacted global financial markets and whether those fears are excessive.

“We find that macro spillovers from China to the major economies are likely manageable, the fist of FX debt mismatches tied to a weaker CNY and EM currency pressures is limited, and that assets are pricing much more pessimistic growth scenarios for China (and the US) relative to recent data and our own views,” Nathan explained.

Nathan explained that Goldman economists estimate that global financial markets are currently pricing in growth in China that is under 2.0 percent, well below any current forecasts. China’s 6.9 percent GDP growth in 2015 was…

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