SINGAPORE -- China has the muscles to push short-term domestic growth, but Japan and South Korea will continue to grapple with various difficulties in trying to rev up their sluggish economic engines into higher gear, said Standard & Poor's Ratings Services here on Tuesday.
In recent separate reports on the three countries, S&P said China will steer its economic policy toward supporting growth, despite some anticipated hurdles, while Japan and South Korea both face political stalemates, high oil and food prices, decelerating growth, among other issues.
The report said China is counting on its strong domestic demand to pull its economy ahead this year and next, "We expect tight labor market conditions, together with the implementation of the new Labor Contract law this year, to keep wage growth strong and lower uncertainties faced by employees."
Japan, caught in its web of political stalemate and sputtering growth, has little potential for economic improvement in the near term, said S&P.
The report said Japan, the second-largest economy in the world, will have weak overall growth prospects in 2008. Japan's GDP growth for fiscal 2008 ending March 31, 2009, is expected to be 0.7 percent, which is lower than earlier forecast of 1.2 percent.
South Korea's growth is expected to be slower at 4.3 percent for 2008, from 5.0 percent in 2007, another report on the country by S&P said.