China Economic Crisis: Korea’s Response

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Many believe that the Chinese economy is facing its biggest crisis since the reform and opening-up 40 years ago.
The era of past high growth has ended, and now the economy is entering a phase of moderate growth.
- A decade ago, China already acknowledged the end of the high-growth era with the "New Normal" declaration.
- The IMF report also pointed out that the current Chinese economy has been growing on debt, and there is now no room for additional debt expansion.
Structural problems such as the real estate bubble and debt dependence have been neglected for a long time, amplifying the crisis.

The structure where the real estate market contributed 20-25% of China's GDP is facing a severe crisis.
- The estimated number of unsold "empty houses" in China is 60 to 100 million units.
- Major construction companies like Evergrande are under financial intervention to prevent bankruptcy.
- Local governments have also relied on real estate sales for revenue, but the original model has collapsed due to the recession.

Shrinking domestic market: Consumers are losing confidence in the future economy and only increasing their savings.
- There is also a lack of spending power, and the tendency to hoard cash is strong.
- Signs of deflation: The inflation rate (CPI) is 0%, and the producer price index (PPI) is continuously declining.
Corporate investment is contracting: Private companies are focusing on debt repayment instead of new investments.

Worsening youth unemployment: As new investments decrease, the job market is also deteriorating.
Construction/real estate-related jobs account for 40% of the total workforce, and the real estate crisis has a significant impact on the labor market.

Weakened corporate dynamism due to the Xi Jinping government's strong control and emphasis on "socialist color."
- Regulations on big tech companies (Alibaba, Tencent) are strengthened, hindering the vitality of the private economy.
The Communist Party's policies are limited to short-term symptomatic treatments, with limitations in economic structural reform.

If China's economic growth slows down, Korean exports of intermediate and consumer goods will also be hit.
- About 25% or more of Korea's total exports are to China.
Countermeasures: Focus on diversifying export markets (developing emerging markets such as Southeast Asia, the Middle East, and India).

Maintain and widen the technological gap with China in high-value-added industries (semiconductors, eco-friendly technologies, AI).
- Cooperate in areas where it is beneficial, but prepare for risks of technology theft and unfair trade.
- In particular, carefully consider investments in intermediate goods at Chinese factories under U.S. semiconductor export regulations.

Efforts to expand the domestic base that is not affected by external changes.
- Create domestic demand based on global competitiveness in K-content, bio-industry, etc.
- Strengthen policies to boost domestic consumption.

It is unrealistic to expect the "collapse" of the Chinese economy, but we should assume that it has entered a long-term low-growth phase.
Even if China does well, the interdependence with the Korean economy is excessive, and a rapid collapse of the Chinese economy would be fatal for Korea.

Even if the competitiveness of Chinese manufacturing weakens, identify opportunities in advanced technologies and specialized markets.
In particular, there are still many areas where the market, supply chain, and consumption infrastructure in China can be utilized, so it is necessary to modify the approach.

*YouTube Source: [경제 읽어주는 남자(김광석TV)]

– [모아보기] ‘함정’에 빠진 중국 경제. 내수 부진, 부채 위기, 저성장 국면… 글로벌 경제 위협 수준?

[Korean Summary]

[경제 읽어주는 남자(김광석TV)]
“[모아보기] ‘함정’에 빠진 중국 경제. 내수 부진, 부채 위기, 저성장 국면… 글로벌 경제 위협 수준?“

주요 내용을 분리해서 정리해보겠습니다. 중국 경제 위기와 관련된 부분을 간략하고 체계적으로 다시 정리하고 여러분이 이해하기 쉽게 전달할게요.

중국 경제는 개혁개방 40년 이후 최대 위기를 맞이했다는 평이 많다.
과거의 고성장은 종료, 현재는 중속 성장 진입.
- 10년 전 중국은 이미 "뉴노멀(신창타이)" 선언으로 고성장 시대가 끝났음을 인정했음.
- IMF 보고서도 현 중국 경제가 부채 기반의 성장을 해왔고, 현재는 추가 부채 확대 여력이 소진되었다고 지적.
부동산 거품과 부채의존 구조적 문제가 오랜 기간 방치되면서 위기가 증폭됨.

중국 GDP의 20~25%가 부동산 시장에서 기여하던 구조에서 심각한 위기를 맞음.
- 중국 내 미분양 "빈집" 추정치는 6000만~1억 채.
- 주요 건설업체인 헝다(에버그란데) 등 다수 업체가 파산 위기를 막기 위해 재정 개입 중.
- 지방 정부도 부동산 매각을 통해 재정을 충당해왔으나, 불황으로 애초 모델이 붕괴.

내수 시장 위축: 소비자들은 미래 경제에 신뢰를 잃고 저축률만 증가.
- 소비 여력이 없기도 하며, 현금을 비축하려는 심리가 강함.
- 디플레이션 조짐: 물가 상승률(CPI) 0%, 생산자 물가(PPI) 지속적 하락.
기업 투자는 위축: 민간 기업들이 신규 투자 대신 부채 상환에만 몰두.