IMF Asia-Pacific Director: "China's Economic Slowdown Negatively Impacts ASEAN Countries' Development"

Krishna Srinivasan, Director of IMF Asia-Pacific, is delivering the keynote speech at the ASEAN+3 Economic Cooperation and Financial Stability Forum held on the morning of the 16th at the Bank of Korea headquarters in Jung-gu, Seoul. Photo by Bank of Korea

There has been a claim that the slowdown in China's economic growth rate will have a negative impact on the economic development of major Southeast Asian countries.

Krishna Srinivasan, the Asia-Pacific Director of the International Monetary Fund (IMF), stated this during his keynote speech at the ASEAN+3 Economic Cooperation and Financial Stability Forum held on the morning of the 16th at the Bank of Korea headquarters in Jung-gu, Seoul. ASEAN+3 is a cooperative forum that includes Southeast Asian countries along with South Korea, Japan, and China.

Director Srinivasan analyzed, "If China's economic growth rate falls by 1 percentage point, the average gross domestic product (GDP) of ASEAN countries is estimated to decrease by about 0.2 to 0.4%, and GDP could decline by up to 1% over five years."

He added, "The impact of China's economic downturn varies among ASEAN member countries depending on their trade exposure with China," citing examples: "Vietnam has a large trade share with China, whereas Thailand's is relatively small, so the impact may be less."

Director Srinivasan also assessed that the US-China trade dispute has, in some ways, benefited ASEAN countries. This is because products whose exports were blocked from China due to US sanctions were instead exported through ASEAN countries.

He explained, "Exports of products subject to tariffs from China or the US in ASEAN countries grew faster than those of products not subject to such tariffs," and added, "ASEAN has utilized this opportunity for trade diversion to increase exports."

However, he noted that the more trade conflicts intensify among countries, the greater the negative impact on all nations. He emphasized, "Trade fragmentation causes inefficiencies in supply chains and, in the long term, all countries suffer losses."