The trade war between Washington and Beijing won't have a huge effect on the Chinese economy, the former People's Bank of China (PBOC) governor Zhou Xiaochuan told CNBC Friday.

"We used a mathematical model to calculate the negative impact of the trade war. It is not very large, it is not significant. It is less than half a percent (of an) impact to the Chinese economy," Zhou told CNBC's Steve Sedgwick at the Ambrosetti Forum on the shores of Lake Como in Italy.

President Donald Trump has said he's ready to erect tariffs on all $506 billion worth of Chinese imports to the U.S. So far, Washington has slapped duties on $50 billion worth of Chinese goods, and a fresh $200 billion more is threatened this month. China can't match the tariff threats because of the mismatch in trade.

Zhou said China's response would be to quickly re-route goods to other countries and this is what the PBOC has also advised President Xi Jinping.

"The worst case scenario is that China is no longer going to export $500 billion of goods to the U.S. market and then its dependent how quickly you can diversify those export goods to the other countries. Actually I think China could act quickly," Zhou added.