Published : 2014-03-14 20:53
Updated : 2014-03-14 20:53
Over the past weeks, global attention has been drawn to a string of economic figures and policy goals announced by China. As a country that relies on China for nearly 30 percent of its exports, Korea has also kept a close eye on developments in the world’s second-largest economy.
The latest data on trade and industrial output have raised concerns about the slowdown in China’s economic growth. The country recorded an unexpected trade deficit of $23 billion in February, with exports falling by 18.1 percent to $114 billion. It marked the country’s first trade deficit in 11 months. China’s industrial production rose by 8.6 percent in January and February year-on-year, the worst growth rate in nearly five years.
Some analysts downplayed the trade deficit, citing the country’s holiday season as a main factor for the weak performance. They note that improving foreign demand bodes well for China’s external commerce this year.
But more skeptical experts say the recent fall in China’s exports may portend a long-term trend that reflects a structural change in global trade since the 2007-08 financial crisis. Even if foreign demand rises, China’s overseas shipments may not see much increase, as major advanced economies have tried to bolster their own manufacturing sectors. The coming months will show which forecast proves true.
Premier Li Keqiang last week announced a growth target of around 7.5 percent for this year, reiterating the importance of fostering consumer demand. This goal, which is the same as the 2013 target and equates to the lowest growth levels in China in nearly a quarter of a century, comes as Beijing policymakers strive to put the economy on a more sustainable track after decades of dazzling expansion ― an expansion that has caused many internal imbalances. In his press meeting at the close of the National People’s Congress on Thursday, Li reaffirmed the Chinese leadership’s determination to fight pollution.
This transition in China’s economic conditions and policies has posed both opportunities and challenges for Korean businesses. Efforts should be stepped up to expand their presence in China’s growing domestic market.
Korean companies may find more business opportunities by aligning themselves with China’s policies to develop its backward midwestern region and open its service sector. They are also poised to gain opportunities by contributing to Beijing’s drive to settle deteriorating environmental problems.