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● China Risk Looms, Trade War Impact

Global Economic Outlook: Analysis of China’s Economy, US-China Trade War, and Korean Economic Crisis

[Current Global Economic Trends and Korean Economic Situation]

Viewing the real economy and capital markets separately.
From a real economy perspective, countries with high external dependence like Korea are facing export contraction and domestic demand slowdown due to trade policy changes in major powers like the US and China.
Contraction of the domestic market, sluggish real estate market, and rising prices are directly affecting the labor market and self-employed individuals.
In the capital market, outflow of foreign capital and anxiety among individual investors are increasing.

[China’s Internal Economy: Dual Structure of Old Economy vs. New Economy]

Analyzing China’s GDP by dividing it into the old economy and the new economy.
The old economy is showing a prolonged decline in traditional industries, real estate, etc., with the possibility of contraction comparable to a ‘lost 20 years.’
The new economy is showing solid growth in areas such as high-tech industries, AI, robots, electric vehicle batteries, and semiconductors.
The overall growth rate of the Chinese economy is maintaining a level of 4-5% as the two sectors complement each other.

[US-China Trade War and Global Competition Structure]

The US’s principle of prioritizing its own country and its external tariff policies are intensifying the US-China trade war.
As a result, Chinese companies based on traditional industries are suffering from competitive pressure and showing sluggish performance.
Companies are showing cautious movements in terms of foreign direct investment (FDI), considering maintaining existing factories in China and partially relocating overseas.
It is pointed out that establishing long-term strategies is very risky, considering changes in tariff policies and short-term uncertainties.

[Impact on the Korean Economy and Response Strategies]

Korea is highly dependent on foreign countries and reacts sensitively to fluctuations in the US and China.
Due to the reorganization of the global supply chain and the trade war, export decreases, internal consumption contraction, and real estate market moderation are appearing.
As future response strategies, it is necessary to expand foreign exchange reserves, maintain the soundness of private capital, and promote policies to revitalize domestic demand.
Economic crisis and low growth should be viewed separately, and correct diagnosis is critical for policy decisions.

[Possibility of China’s Economic Crisis and Future Prospects]

Contraction of private investment, collapse of the real estate market, and increase in marginal companies are acting as weaknesses in the old economy sector of China.
External shocks such as ODA budget cuts and global infectious disease risks are also being monitored together.
However, the new economy sector is presenting solid growth momentum through innovation investment, and the aspect of strengthening competitiveness is more prominent than the crisis of transition.
The aftermath of the US-China trade war and the contraction of domestic demand may act as short-term shocks, but in the long term, the Chinese economy will maintain its power of scale.

[Future Prospects: Global Economy, Balance of Power between the US and China]

Changes in the GDP increase of China and the economic power between developed countries such as the US and Europe are expected to reorganize the global economic landscape.
Both the US and China have their own strengths and weaknesses, and even if there are short-term policy changes and trade conflicts, the growth engine of the world economy is likely to be maintained.
Korea must seek to transform its economic structure through flexible policy responses and investment in new industries in this global trend.

Currently, the global economy is becoming unstable in the real economy and capital market due to policy changes in the US and China.
The Korean economy is highly dependent on foreign countries and is sensitive to the US-China trade war and the possibility of a global economic crisis.
The Chinese economy is showing a dual structure of sluggishness in the old economy sector and advanced growth in the new economy sector, and there is a possibility of short-term contraction, but in the long term, it is expected to maintain its power of scale.
Correct diagnosis and policy establishment are essential, focusing on key keywords such as US-China trade conflict, foreign exchange reserves, and domestic demand revitalization (Chinese economy, US-China trade war, global economy, Korean economy, economic crisis).

[Related Posts…]
Analysis of China's Economic Crisis
Prospects for the US-China Trade War

*YouTube Source: [경제 읽어주는 남자(김광석TV)]

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