China’s role as a stabilizer for East Asian economies is unlikely to change in the foreseeable future, and will remain the most significant contributor to the economic growth of East Asia and even the whole world, stated Mei Xinyu, researcher of international trade at the Ministry of Commerce, writing in
21st Century Business Herald.
Mei quoted a study by economists Ronald McKinnon and Gunther Schnabl as showing that between 1980 and 2001 the variable coefficient for East Asia’s overall economic growth rate when excluding the Chinese mainland and Japan had been 0.49. The figure immediately fell to 0.29 when the Chinese mainland was counted and rose back to 0.38 with Japan also factored in, the study showed.
East Asian economies had benefited the most from exports to China, Mei said. While China has maintained a trade surplus with the United States and European Union, its trade with Japan and South Korea has had an enduring trade gap.
Japan in particular, Mei said, had remained the largest source of imports into China for nearly four decades since the 1970s. During the long-term recession following the bubble burst in 1990, the trade with China was one of the rare sparkling points among Japan’s dull economic figures, Mei said.
In this situation, any damage to trade relations with China by these economies will surely jeopardize their economic prospects, Mei said. Political frictions had caused Japan to soon lose its trade advantage with China to South Korea, which had looked enthusiastically to expand its Chinese market, Mei said. In 2013, South Korea’s volume of exports to China exceeded that of Japan for the first time.
“To some extent, it’s the disparity in their share of the Chinese market that has gradually led to the economic gap between South Korea and Japan, in terms of both the total size and GDP per capita, to notably narrow,” Mei said. “But now, is South Korea ready to fall into Japan’s old trap?”
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