S Korea says to closely watch risks in Chinese economy

Updated: 2011-10-25 11:15


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SEOUL - South Korea planned to closely watch Chinese economy's potential risk factors given the nation's heavy dependence on the world's No 2 economy, the central bank said Tuesday.

"The government and the central bank shared the view that Chinese economy sustained its annual growth rate of over 9 percent in the third quarter, but the world's second-largest economy is facing potential risk factors such as a distress in the non-banking sector and the possible plunge in housing prices," the Bank of Korea (BOK) and the Ministry of Strategy and Finance said in a joint statement after holding a macroeconomic policy consultation meeting.

The meeting was the fourth of its kind since the finance ministry and the BOK agreed in June to hold a regular meeting for policy coordination every month. BOK Senior deputy governor Lee Ju- yeol and vice finance ministry Shin Je-yoon attended the meeting.

China's potential risks factors, however, would unlikely be materialized in the foreseeable future as the Chinese government have enough money to tackle such risks, according to the statement. The central bank and the finance ministry also shared the view that the Chinese economy would achieve a soft landing if the nation's economic growth is to slow down.

The two agencies planned to closely watch China's economic trends and the potential risk factors considering the South Korean economy's heavy dependence on the world's No.2 economy and the status of China in the global economy.