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Only a big Chinese slowdown would significantly affect German growth: Bundesbank
[FRANKFURT] Only a dramatic slowdown in Chinese growth would significantly affect Germany, the eurozone's biggest economy, but data so far do not indicate this is happening, Bundesbank board member Joachim Nagel said on Monday.
"According to our estimates, a four percentage point drop in growth in China would lower German gross domestic product by roughly a quarter (of a) percentage point," Mr Nagel told a business forum.
"Such a slump is not to be expected at present, however." Mr Nagel said China's economy is undergoing a natural transformation from export driven growth to an emphasis on services, and its rate of expansion is still rapid.
"We are seeing a clear correction in the industrial sector, in which excess capacity is being reduced," Mr Nagel said. "This is also confirmed by German exporters and producers on site. Growth in trade and services still seems to be good, however." China's economic growth dipped below seven per cent for the first time since the global financial crisis in the third quarter, hurt partly by cooling investment.