News / Economy

China's Slowing Economy a Mixed Blessing for Asian Neighbors

Employee works inside silk factory in Neijiang, Sichuan province, July 3, 2013.
Employee works inside silk factory in Neijiang, Sichuan province, July 3, 2013.
Ron Corben
Economists say China's slowing economic growth may be a cause for concern for some of its neighbors in Asia, especially those that have become more dependent on China's booming economy in recent years.

This week Beijing announced that its economy grew 7.5 percent in the second quarter of the year (compared to 2012) -- a figure largely in line with observers’ expectations, but still a dramatic departure from years of near 10 percent growth.  
This slowdown has been influenced partly by the continuing downturn in the international economy as well as Beijing’s policies to cool some economic sectors by tightening credit and allowing the value of China’s currency, the Renminbi, to rise.
The slowing Chinese economy has sent ripples of concern across the Asia Pacific. China's continued growth; largely due to government investment and easier credit, has been important for helping the region withstand the global financial crisis since 2008.
But Asian Development Bank principal economist Donghyun Park said the slower growth indicates China’s past policy of "growth at all costs" may have passed.
"The Chinese authorities are more than prepared to swallow or accept slower growth in exchange for greater stability down the road," the economist said. "That is why they are consciously, deliberately if you will, tolerated the tightening of the credit conditions in the interbank market. So the past mentality, the past way of thinking of a growth at all costs very fortunately and appropriately -- that's coming to an end."
In recent years, China’s government has helped spur investment and lending to keep its economy growing at nearly 10 percent per year -- a rapid expansion that lifted millions out of poverty, but also led to rising concerns over its environmental and social impact.
Now, with Beijing prepared to bring growth under control, regional economies, such as Australia and Indonesia, key beneficiaries of China's demand for raw materials, have already warned of slower growth in key industries.
ADB's Park said the outlook for the Asia Pacific is a mixed one in light of China's slower growth, but ultimately what is good for China is also good for its neighbors.
"The exact impact will differ from country to country," he noted. "Outward oriented export dependent economies will suffer more than Indonesia or the Philippines where domestic demand plays a greater role. Overall in the short term China's slowdown has negative ramifications but I think a more sustainable growth in China, but it's also a good thing for the rest of the region."
Doug Clayton, a senior executive of emerging market finance house, Leopard Capital, said China's rapid growth has led to new investment in economies such as Cambodia, as firms relocate due to China's higher costs. Clayton remains positive about China's impact on the region's economies.
"It bodes pretty well. China has this vast potential consumer market and if they develop it, I think South East Asia is a good supplier of things that China needs, whether its food products or electronic components or car parts," he said.
Clayton added that as China's economy further matures the outbound tourism market will be a boon for economies such as Thailand.
According to economists, China's many challenges include enacting steps to develop a stronger, sounder and more efficient financial system and moving further away from a growth policy based on excessive lending and investment.

You May Like

Guatemala Mudslide Death Toll Rises to 86

Death toll is expected to continue to rise as emergency crews dig through tons of earth for an estimated 350 people still missing More

Goodbye Pocahontas: Photos Reveal Today's Real Native Americans

Weary of stereotypes, photographer Matika Wilbur is determined to reshape the public's perception of her people More

Debris Found in Search for Missing Ship

Objects located Sunday have not yet been confirmed to be from the 240 meter container ship, El Faro, which disappeared in the eye of Hurricane Joaquin, according to US Coast Guard More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Russia’s Syria Involvement Raising Concerns in Europei
Luis Ramirez
October 02, 2015 4:45 PM
European nations are joining the United States in demanding that Russia stop targeting opposition groups other than the Islamic State militants as Russian warplanes continue to conduct raids in Syria. The demand came in a statement from Britain, France, Germany, Qatar, Saudi Arabia, Turkey and the United States Friday. VOA Europe correspondent Luis Ramirez reports.

Video Russia’s Syria Involvement Raising Concerns in Europe

European nations are joining the United States in demanding that Russia stop targeting opposition groups other than the Islamic State militants as Russian warplanes continue to conduct raids in Syria. The demand came in a statement from Britain, France, Germany, Qatar, Saudi Arabia, Turkey and the United States Friday. VOA Europe correspondent Luis Ramirez reports.

Video First Self-Driving Truck Debuts on European Highways

The first automated semi-trailer truck started its maiden voyage Friday, Oct. 2, on a European highway. The Daimler truck called 'Actros' is the first potentially mass-produced truck whose driver will be required only to monitor the situation, similar to the role of an airline captain while the plane is in autopilot mode. VOA’s George Putic reports.

Video Nano-tech Filter Cleans Dirty Water

Access to clean water is a problem for hundreds of millions of people around the world. Now, a scientist and chemical engineer in Tanzania (in East Africa) is working to change that by creating an innovative water filter that makes dirty water safe. VOA’s Deborah Block has the story.

Video Demand Rising for Organic Produce in Cambodia

In Cambodia, where rice has long been the main cash crop, farmers are being encouraged to turn to vegetables to satisfy the growing demand for locally produced organic farm products. Daniel de Carteret has more from Phnom Penh.

Video Migrant Influx Costs Europe, But Economy Could Benefit

The influx of hundreds of thousands of refugees and migrants is testing Europe’s ability to respond – especially in the poorer Balkan states. But some analysts argue that Europe will benefit by welcoming the huge numbers of young people – many of them well educated and willing to work. Henry Ridgwell reports from London.

Video Botanists Grow Furniture, with Pruning Shears

For something a bit out of the ordinary to furnish your home, why not consider wooden chairs, crafted by nature, with a little help from some British botanists with an eye for design. VOA’s Jessica Berman reports.

Video New Fabric Helps Fight Dust-Related Allergies

Many people around the world suffer from dust-related allergies, caused mainly by tiny mites that live in bed linen. Polish scientists report they have successfully tested a fabric that is impenetrable to the microscopic creatures. VOA’s George Putic has more.

Video Burkina Faso's Economy Deeply Affected by Political Turmoil

Political turmoil in Burkina Faso over the past year has taken a toll on the economy. The transitional government is reporting nearly $70 million in losses in the ten days that followed a short-lived coup by members of the presidential guard earlier this month. The crisis shut businesses and workers went on strike. With elections on the horizon, Emilie Iob reports on what a return to political stability can do for the country's economic recovery.

Video Fleeing Violence, Some Syrians Find Refuge in Irbil

As Syrians continue to flee their country’s unrest to seek new lives in safer places, VOA Persian Service reporter Shepol Abbassi visited Irbil, where a number Syrians have taken refuge. During the religious holidy of Eid al-Adha, the city largely shut down, as temperatures soared. Amy Katz narrates his report.

Video Nigeria’s Wecyclers Work for Reusable Future in Lagos

The streets and lagoons of Africa's largest city - Lagos, Nigeria - are often clogged with trash, almost none of which gets recycled. One company is trying to change that. Chris Stein reports for VOA from Lagos.

Video Sketch Artist Helps Catch Criminals, Gives a Face to Deceased

Police often face the problem of trying to find a crime suspect based on general descriptions that could fit hundreds of people in the vicinity of the crime. In these cases, an artist can use information from witnesses to sketch a likeness that police can show the public via newspapers and television. But, as VOA’s Greg Flakus reports from Houston, such sketches can also help bring back faces of the dead.

Video Thailand Set to Build China-like Internet Firewall

Thai authorities are planning to tighten control over the Internet, creating a single international access point so they can better monitor content. VOA Correspondent Steve Herman reports from Bangkok on what is being called Thailand’s own "Great Firewall."

Video Croatian Town’s War History Evokes Empathy for Migrants

As thousands of Afghanistan, Iraqi and Syrian migrants pass through Croatia, locals are reminded of their own experiences with war and refugees in the 1990s. VOA's Daniel Schearf reports from the town of Vukovar, where wartime scars still are visible today.

Video Long Drought Affecting California’s Sequoias

California is suffering under a historic four-year drought and scientists say even the state's famed sequoia trees are feeling the pain. The National Park Service has started detailed research to see how it can help the oldest living things on earth survive. VOA’s George Putic reports.

VOA Blogs

World Currencies


Rates may not be current.