The growth rate of China's economy stood at 6.6 percent last year, down from 6.8 percent in 2017. It was the slowest expansion since 1990 when the growth rate remained at 3.9 percent in the aftermath of the bloody crackdown on protesters in Tiananmen Square the year before.
The quarterly growth during 2018 also was on a steady decline from 6.8 percent to 6.7 percent, 6.5 percent and 6.4 percent.
Experts attribute the slowdown to internal factors, such as sluggish domestic consumption and a debt reduction policy, exacerbated by an external one ― the U.S.-China trade war.
What is more problematic is that the outlook for this year is even worse. The World Bank expects China's growth rate to fall further to 6.2 percent in 2019, while the OECD estimates it at 6.3 percent. Some global investment banks are even more pessimistic, predicting the growth rate will sink to the 5 percent range.
Korea, which depends heavily on the Chinese economy for its growth, cannot help being deeply concerned. Some think tanks say that if China's economic growth rate falls 1 percentage point, that of Korea drops 0.5 percentage points, indicating the immense impact Asia's largest economy has on its fourth-largest neighbor.
The Moon Jae-in administration has set this year's growth target at 2.6-2.7 percent, but some private economists forecast it will barely exceed 2 percent. The government hopes it will be able to add 150,000 new jobs, but will likely find it hard to hit the target if the economy shows a lackluster performance.
All this shows why President Moon's economic team should be extra alert and make thorough preparations. Close monitoring should minimize the adverse effects outside factors have on the economy. If the Chinese economy suffers a hard landing, it could shake up the global economy throwing it into an unexpected whirlwind.
Most important in this regard is the underlying strength of the Korean economy. To maintain strong fundamentals, the government should take bolder measures to reinvigorate corporate activities and speed up economic recovery.