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Park calls for change of S. Korea's economic structure

All Headlines 14:55 October 07, 2015

SEOUL, Oct. 7 (Yonhap) -- President Park Geun-hye said Wednesday that South Korea should change its economic structure to better cope with challenges caused by economic changes in China.

China is pushing to boost domestic consumption in a major transition for the world's second-largest economy that has long relied on exports and investment for economic growth.

"We should make efforts to expand our overseas markets through a free trade agreement with China," Park said in a meeting with members of an advisory committee on economic affairs.

South Korea and China signed a free trade agreement in June, though the deal has yet to be ratified by the Seoul and Beijing legislatures.

"In a long-term perspective, we should change our economic structure in a way that can effectively respond to changes in China."

China is South Korea's largest trading partner with two-way trade volume reaching US$235 billion in 2014. Millions of people travel between the two countries annually.

Park also said South Korea should explore strategies to stay ahead of Chinese competition while pursuing measures conducive for mutual economic growth, noting China "still presents various opportunities" to South Korea.

On Tuesday, the International Monetary Fund lowered South Korea's economic growth outlook for 2015 to 2.7 percent from an earlier 3.1 percent, citing slumping exports and weak domestic consumption.

In its latest World Economic Outlook report, the Washington-based organization said the downgrade stems from the weakening of economic activity sparked by negative growth in exports and anemic consumption.

South Korea's exports account for about half of its gross domestic product.

"There are still many mountains to cross for a new economic takeoff," Park said, referring to internal and external challenges facing South Korea.

Park voiced confidence South Korea can turn crisis into opportunity, citing the "Saemaeul Movement," or new community movement, which served as a springboard for South Korea's leap forward.

The initiative -- launched by Park's father, then-President Park Chung-hee in the 1970s -- is credited with helping modernize the then-rural South Korean economy.


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