The growing competitiveness of Chinese companies is posing great risks for South Korean firms, while China's slowing economic growth is creating short-term risks for Asia's fourth-largest economy, Seoul's top central banker said Wednesday.
  

"Regarding China risks, many experts are focusing on China's slowing domestic demand, but what we must pay more attention to is progress in China's industrial competitiveness," Bank of Korea Gov. Lee Ju-yeol said in a monthly meeting with economic experts here.
  

The central bank governor has repeatedly pointed to problems stemming from China's slowing economic growth that has been blamed for a dip in South Korea's own exports.
  

China is by far the world's single largest importer of South Korean goods, accounting for over 25 percent of South Korea's overall exports last year. South Korea's exports have fallen every single month since the start of the year, plunging 15.8 percent on-year in October.
  

Lee said problems for South Korean exports coming from China may be more permanent than previously believed.
  

"If we say China's slowing economic growth due to sluggish demand is a macroeconomic risk, the narrowing gap between the competitiveness of South Korean and Chinese firms is a micro risk," he said at the breakfast meeting.
  

Growing competition from Chinese companies in the global market has long been an issue for South Korean firms, while further improvements by Chinese competitors will certainly eat into South Korean exports.
  

The BOK chief urged local companies to boost their investment in research and development to help prevent such cases, while also calling on the local government to create and improve a business environment that promotes investment.
  

"India is fast becoming a new growth engine of Asia. And we need to pay attention to the fact that India's recent rise has been made possible by a bold move (by the Indian government) to remove all unnecessary regulations hampering investment not only by local companies but also by foreign investors," he said.
 

In a report released Monday, the state-run Korea Institute for Industrial Economics and Trade said South Korean manufacturers currently have an average 3.3-year technological lead over their Chinese counterparts, down from 3.7 years in 2011. (Yonhap)