By Leika Kihara
TOKYO, July 17 (Reuters) - China’s economic slowdown is likely to weigh on Southeast Asian economies but is unlikely to lead to a steep downturn in the region’s growth, the president of the Asian Development Bank said on Wednesday.
“Chinese exports are making a clear slowdown and may not sustain the momentum seen in the past,” Takehiko Nakao, Japan’s former top currency diplomat, said at a news conference in Tokyo.
Nakao said he saw no serious short-term risks to China’s economy, adding that the country’s challenges were more about achieving sustainable, balanced growth driven by personal consumption.
China’s current economic growth was too reliant on capital expenditure, so the key is whether overall growth would be supported more by strength in personal consumption, he added.
“The challenge is whether China can make a smooth transition in the medium- to long-term,” he said.
“Risks remain on whether China can strike a balance between consumption and investment, and if it can smoothly achieve reforms in its financial and currency systems as well as its state-owned companies,” Nakao said.
On Tuesday the ADB cut its growth forecasts for developing Asia this year and the next as a softer outlook for China, the world’s second-largest economy, meant subdued economic activity elsewhere in the region.
China’s annual GDP growth slowed to 7.5 percent in April to June - the ninth quarter in the last 10 that expansion has weakened - putting pressure on Beijing to quicken reforms rather than slow them to take up the economic slack.