Wary of China Economic Impact of Inaction , Will Impact On Indonesia

Wary of China Economic Impact of Inaction , Will Impact On Indonesia



 China's economic growth to slow to 7.5 % this year and 7.4 % next year due to the government's efforts to rebalance the economy , according to estimates of the Asian Development Bank ( ADB ) . This decrease will have an impact on the general growth in the developing countries of Asia .

In its Asian Development Outlook 2014 report published Tuesday , the ADB said growth in emerging Asia will remain strong in the next two years . However , growth will depend on several factors : the country's economic recovery industry , which is predicted to continue to strengthen ; and China 's ability to stem the growth of domestic credit . If China's efforts to reduce credit expansion lasts too sudden , growth will continue to weaken . Growth prospects of China's trading partners in Asia would also fall .

China's economic growth slowed to 7.7 % in 2013 , lower than the double-digit growth rates in recent years . According to the ADB , the cause is a combination of reduced credit expansion , elimination of excess capacity in industry conditions , increased local government debt , rising wages , high value of the yuan , and continue changing development priorities in China . These factors " are still very relevant " this year , the ADB said .

Beijing has sought to maintain economic growth at levels required to create sufficient jobs . China itself wants to reduce its reliance on investment and exports and increasing the role of domestic consumption as a determinant of growth . At the same time , Beijing difficulty handling rate of domestic credit expansion . Flooding has the potential to cause widespread credit defaults and the risk to the banking system .

Despite the slowdown in Chinese growth is inhibited , the ADB said Asia's developing countries can print the 6.2 % growth in 2014 and 6.4 % in 2015 due to increasing demand from developed countries . This figure is higher than 6.1 % growth last year . Nevertheless, any problems that threaten the economic recovery of developed countries also affect the export demand in Asia , ADB added .

According to the ADB , the largest growth berekonomi five countries in Southeast Asia will be stable at 5.2 % , the rate of which is printed in 2013 . These include Indonesia, Malaysia , Philippines , Thailand , and Vietnam . Prospects for growth will rise to 5.6 % in 2015 in line with the slowdown in inflation in Indonesia and Thailand reduced political disputes .

WSJ