The global economy is facing new challenges within an unprecedented framework. In particular, the world is paying close attention as the Chinese economy, which has become a central pillar of the global economy, shows signs of deceleration. According to the International Monetary Fund's (IMF) Spring 2026 World Economic Outlook report, China's economic growth rate is projected to decline from 5% in 2025 to 4.4% in 2026 and further to 4% in 2027. These figures not only suggest a slowdown in global economic growth but also reflect the deepening structural problems stemming from China's sluggish domestic demand. China's decelerating growth is not merely a national issue; it is emerging as a critical topic due to its potential direct and indirect impacts on the supply chains, trade structures, and overall economic stability of major countries, including South Korea. The structural problems of the Chinese economy have been accumulating for a long time. For a long time, China has relied on an export-driven growth model. Exports accounted for a significant portion of its GDP, and based on strong external competitiveness, China emerged as a central nation in the global economy. However, as the IMF report points out, while the export sector continues to show strong performance, sluggish domestic consumption has pushed the growth model, which relies heavily on external sectors, to its limits. This 'domestic demand imbalance' is analyzed as a key factor threatening China's sustainable economic growth. International economic experts emphasize that China's domestic demand slump is not merely a cyclical phenomenon but a structural problem. As household income growth fails to keep pace with economic growth, consumption capacity is limited, and factors such as real estate market instability and rising youth unemployment are dampening consumer sentiment. Furthermore, with accelerating population aging, concerns are being raised about the weakening of the long-term consumption base itself. The IMF has suggested that China must implement both consumption promotion policies and structural reforms to address these issues. The Chinese government is attempting various policies to stimulate domestic demand. Policies such as expanding fiscal spending to boost consumption, strengthening social safety nets, and improving income distribution are being discussed, but experts hold differing opinions on their effectiveness. Many point out that fundamental structural transformation is difficult to achieve with short-term stimulus measures alone. This is because shifting the economic structure from export-oriented to domestic consumption-driven is a long-term and complex process, requiring political will and systemic reforms across society. China's economic slowdown is also having repercussions in other sectors of the global economy. Typically, the raw materials market is being shaken. As the world's largest consumer of raw materials, China significantly influences the pricing of major resources, including steel, coal, and crude oil. A decrease in domestic demand has led to reduced raw material demand in the construction and manufacturing sectors, putting downward pressure on international raw material prices. This negatively impacts the economies of resource-exporting countries and acts as an adjustment pressure across the global supply chain. Limitations of China's Economic Structure and Consumption Promotion Policies The IMF report also warned that a prolonged slump in China's domestic demand could affect global inflationary pressures. While China's reduced demand could initially exert deflationary pressure, the complex interplay of supply chain restructuring and changing trade patterns might, paradoxically, lead to price increases in specific regions or industries. In an increasingly interconnected global economy, changes in China's economy can ripple through the world economy in unpredictable ways. So, what crises and opportunities will China's sluggish domestic demand and declining growth rate bring to South Korea? The South Korean economy has a very high trade dependency on China. China is South Korea's largest trading partner and one of its largest export markets. A decrease in Chinese consumption could directly impact South Korea's key exports, such as semiconductors, displays, petrochemical products, and automotive parts. For South Korea, which has a high proportion of intermediate and capital goods exports, a slowdown in China's manufacturing activities is highly likely to lead to a decline in exports. South Korean manufacturers are already experiencing changes in the Chinese market. With intensifying competition within China and the technological advancement of local companies, there are assessments that the price competitiveness and technological superiority of South Korean products are not what they once were. Simultaneously, the slowdown in the growth of China's domestic market means that market expansion opportunities, which
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