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THE INVESTOR] The changing structure of Chinese economy could cut South Korea’s exports by US$ 25 billion until 2020, the Bank of Korea said in a report on July 15.
In the report, the central bank said that should China’s economy become more spending-centric, the rate at which South Korea’s exports to China increases will drop by 0.8 percentage point each year.
The parameters in the scenario are the ratio between of China’s gross domestic product and consumer spending rises 5 percentage points by 2020, while investment and exports drop 4 percentage points and 2 percentage points, respectively. Last year, GDP-spending ratio came to 52.3 percent. The ratios for investment and exports stood at 44.1 percent, and 22.1 percent, respectively.
According to the BOK’s calculations, South Korea’s exports will reduce by US$ 25 billion in the five-year period. The figure includes US$ 23 billion drop in exports to China, and US$ 2 billion in exports to other countries.
“(South Korea) must seek ways to enter China’s market for consumer goods,” the BOK said, adding that more South Korean businesses need to seek expansion in China.
By Choi He-suk (
cheesuk@heraldcorp.com)