China’s Economy Weakens, Here’s the Impact on Global and RI

Jakarta – Senior economist, as well as Independent Commissioner of BCA, Raden Pardede revealed that the weakening of the Chinese economy will have an impact on the global economy and in Indonesia.

He explained that every 1 percent of economic growth in China will affect 0.4 percent of world economic growth. Meanwhile, the impact on Indonesia is around 0.29 percent of 1 percent of China’s economic growth.

“So if he (China) goes down, the world economy will go down. Every 1 percent of economic growth in China will affect 0.4 percent of world economic growth, and every 1 percent of China’s economic growth has an impact on Indonesia of around 0.29 percent. So the impact will also be on us,” Raden said at the BCA Indonesia Knowledge Forum 2023 in Jakarta, Wednesday, October 11, 2023.

Raden added that China is the motor of world economic growth by contributing 40 percent. Thus, the weakening of the Chinese economy will greatly affect the decline in the world economy.

“Remember that China is the motor of world economic growth, China’s growth contribution to world economic growth is 40 percent so far,” he said.

He also explained, in the early 2000s China’s economic growth was at the level of 8-10 percent. Then, currently it has decreased to an average of 4.5 percent and in the future it is predicted that it will only reach 3 percent.

For information, the International Monetary Fund (IMF) again cut China’s economic growth forecast in 2023 to 5.0 percent from the previous 5.2 percent. Likewise in 2024, the IMF cut China’s economic growth to 4.2 percent from 4.5 percent. (*)