Hiroshi Nakaso, Deputy Governor of the Bank of Japan, said that Japan has to take into account potential negative consequences of an economic decline in China. China’s GDP growth rate has an impact on the Japanese exports. Mr. Nakaso believes that the hike of the key interest rate by the US Federal Reserve System can cause a rise in capital outflows from emerging markets and volatility on global markets.
"Even if China's economy maintained its growth rate, the main contribution would be from public investment, so the effect on Asian economies and Japan's exports warrants due attention," the BOJ Deputy Governor said.
However, he is sure that the Japanese economy can withstand such global risks. He also points out that amid the global economic growth, the country’s exports will emerge from the doldrums and that a decline in production is most likely only temporary.
