The current downward trend in Asian economies, led by the Chinese economic slow down, is not a crisis but a part of the economic cycle, Taiwanese Economy official, I-min Tong told Anadolu Agency on Wednesday.
The latest report on China's economy gave more worrying signs as its manufacturing index fell to lowest since August 2012 and its July exports were dropped by 8.3 percent in July. The world's second biggest economy devaluated its currency by more than 3 percent in August.
Many Asian countries like Taiwan depend highly on China's economic performance, which makes 40 percent of its exports to China.
'The Asian crisis was a financial crisis. But now it is a demand problem. The financial problem could be very shocking. This one is a fundamental economic problem,' said Tong, Director General of the International Cooperation Department at the Ministry of Economic Affairs.
'China is also Taiwan’s biggest market. 40 percent of our exports go to China. If they are slowing down, their imports from Taiwan will also decrease,' Tong added.
Defining economy's progress in cycles, Tong explained that the global economy is going through a bad cycle, struggling with low demand and therefore a low growth.
'Global economic growth will be only 2 percent. We should see the performance of Europe. If they can see one percent growth they should be happy,' the general director explained.
IMF downgraded its global growth forecast to 3.3 percent from 3.5 in a July report, a lower rate than what it predicted in 2014.
Citing low demand in China and western countries, mainly Europe and the U.S., Tong said there is no hope in near future.
'This year will be a difficult and challenging year,' he said.
By Furkan Naci Top
Anadolu Agency
furkan.top@aa.com.tr