Anchor: China’s economy is growing just a little bit slower than economists had predicted. In the third quarter of 2018, it grew six-point-five percent year-over-year, falling short of the expected six-point-six percent.
Kurt Achin spoke with a South Korean economist about the significance of the numbers.
Report: The shortfall in China’s growth is just point-one percentage point compared to expectations.
It may deal a blow to this or that individual investor, but Professor Yang Jun-seok of Catholic University in Seoul says it’s not cause for broader panic.
[Sound bite: Yang Jun-seok - Economics professor, Catholic University of Korea (English)]
“They’re still on track to make the six-point-five percent annual growth target. So in that sense, this is not really big news. But on the other hand, it does signal further that the Chinese economy is slowing down, and that has a lot of people concerned not only in China but globally.”
Yang, an economist who specializes in trade, says it’s too soon to attribute the numbers to the ongoing trade war with the United States. He points out that August and September saw record U.S. trade deficits with China.
[Sound bite: Yang Jun-seok - Economics professor, Catholic University of Korea (English)]
“A lot of U.S. importers wanted to beat the tariffs by importing Chinese goods before the tariffs hit. So in that sense, Chinese exports to the U.S. actually grew. But it does signal that more people are going to get nervous about what’s going to happen to China in the future.”
Yang points out that China has been slowing down for several years now from the sizzling growth rates of previous decades, and that Beijing is fine with that. Still, South Korean policymakers will be watching the situation closely.
[Sound bite: Yang Jun-seok - Economics professor, Catholic University of Korea (English)]
“Korea is a major exporting economy. For us about 45 percent of our GDP depends on exports. And 25 percent of that 45 percent is going to China, and a lot of that are intermediate parts going to exports. That’s why we are very much concerned. But the actual amount that Korea may get hit is probably a lot less than most people feared.”
South Korea is struggling with extremely sluggish economic indicators such as low employment. As policymakers here consider measures to stimulate domestic demand, a possible slowdown in the world's second largest economy is just one more tough challenge to face.
Kurt Achin, KBS World Radio News.