South Korea will keep tabs on the potential fallout from a slowdown in the Chinese economy, although the world’s No. 2 economy is likely to make a soft landing despite some downside risks, officials here said Tuesday.

The consensus was reached during a monthly policy consultation meeting between the finance ministry and the Bank of Korea earlier in the day in Seoul. The meeting was attended by Vice Finance Minister Shin Je-yoon and BOK’s senior deputy governor Lee Ju-yeol.

“We shared the view that the Chinese economy is faced with such potential downside risks as an unhealthy non-banking sector and a possible plunge in housing prices despite its recent 9-percent-range growth,” they said in a joint statement after the meeting.

“At this moment, however, the Chinese economy would make a soft landing even if its growth rates slow ... We also shared the view that chances are not high that such potential risks will materialize any time soon,” they added.

The meeting comes amid concerns that an economic slowdown in China could have a significant impact on South Korea, which depends heavily on exports for its own growth. China is the nation’s No. 1 trading partner.

“Given our economy’s heavy reliance on China and its status in the global economy, we agreed to closely monitor developments in China’s economic situation and risk factors,” they noted.

Turning to domestic issues, the two sides also discussed employment market conditions.

They agreed that the nation’s job market has been getting better over the past few months, citing fast job creation and other improving related indicators.

But the two noted that it is still necessary to strengthen monitoring since the job market is facing still lingering uncertainties, according to the statement. 

(Yonhap News)