According to a recent report by the International Monetary Fund (IMF), China’s economic growth is expected to slow down significantly in the next four years, due to various factors such as the impact of the Covid-19 pandemic, the aging population, the trade tensions with the US, and the environmental challenges.

The report, which was released on Wednesday, projected that China’s gross domestic product (GDP) would grow by 5.6% in 2021, 5.3% in 2022, and then gradually decline to 4.9% by 2025. This is lower than the average growth rate of 6.8% that China achieved between 2010 and 2019.

The IMF said that China’s recovery from the pandemic has been uneven and unbalanced, with some sectors such as manufacturing and exports performing well, while others such as services and consumption lagging behind. The report also warned that China faces several long-term structural challenges that could hamper its economic potential, such as the shrinking and aging labor force, the high debt levels, the low productivity growth, and the rising inequality. The IMF urged China to implement reforms to address these issues, such as increasing social spending, enhancing innovation, improving governance, and opening up its markets.

The report also highlighted the risks that China’s economic slowdown could pose to the global economy, especially to the emerging and developing countries that rely on China as a major trading partner and a source of investment. The IMF suggested that China should play a more active role in supporting the global recovery from the pandemic, by providing more financial assistance, vaccine donations, and debt relief to the low-income countries. The IMF also called for more cooperation between China and other major economies on issues such as climate change, trade policy, and digital regulation.

China’s Koreanization strategy penetrates South Korean E-commerce market.

In recent years, China has been pursuing a strategy of Koreanization, which aims to increase its cultural influence and economic presence in South Korea. One of the main aspects of this strategy is to penetrate the South Korean E-commerce market, which is one of the most developed and competitive in the world.

According to a report by the Korea International Trade Association (KITA), China’s E-commerce exports to South Korea increased by 62.8% in 2023, reaching $12.4 billion. This accounted for 28.7% of South Korea’s total E-commerce imports, making China the largest source of online purchases for South Korean consumers.

The report also revealed that China’s E-commerce exports to South Korea mainly consisted of low-priced products, such as clothing, accessories, cosmetics, household goods, and electronics. These products appeal to the price-sensitive and trend-conscious South Korean consumers, who are also influenced by the popularity of Korean dramas and celebrities that feature Chinese products.

One of the key factors that enabled China’s E-commerce penetration into South Korea is the development of cross-border platforms, such as Coupang, Tmall Global, and Kaola. These platforms provide convenient and fast delivery services, as well as various payment options and customer support. They also offer discounts and coupons to attract more buyers.

Another factor that contributed to China’s E-commerce success in South Korea is the improvement of product quality and design. Chinese sellers have been investing more in research and development, branding, and marketing, to enhance their competitiveness and reputation in the South Korean market. They have also been adapting their products to suit the preferences and needs of South Korean consumers, such as offering more sizes, colors, and styles.

China’s Koreanization strategy is not only limited to E-commerce, but also extends to other sectors, such as entertainment, tourism, education, and technology. China hopes to leverage its economic power and cultural appeal to strengthen its ties and influence with South Korea, which is a key partner and rival in the region.

In a shocking revelation, the Central Bank of Nigeria (CBN) announced on Monday that it has uncovered invalid foreign overdue claims amounting to $2.4 billion, adding further pressure on the naira and sending shockwaves through the currency market.

Central bank governor Yemi Cardoso revealed this information during an interview with Arise TV, highlighting the dire consequences of these false claims on the country’s economy. The discovery of these invalid claims came to light after a comprehensive audit conducted by Deloitte, a consulting firm engaged by the CBN.

The CBN said it engaged Deloitte to investigate the situation in an effort to get a clear and accurate understanding of the forex claims.

“We had reasons to believe we needed to take a harder look at these obligations. So we contracted Deloitte management consultants to do forensics of all these obligations and to actually tell us what was valid and what was not,” Cardoso said.

This revelation comes after seven years of concealing the audited accounts of the CBN from public knowledge.

Last year, during the release of the audited accounts, it was disclosed that there was a $7 billion backlog of unmet dollar demand from investors and currency users. This backlog has cast a shadow over the market and, if not addressed promptly, could further weaken the naira, causing it to experience a continued free fall against the dollar.

Nigeria has been grappling with a prolonged foreign exchange (FX) crisis that has significantly impacted its economic stability. This backlog created an overhang in the market, contributing to the depreciation of the naira against the dollar and causing concerns among investors and the public.

The revelation of such a substantial backlog hinted at deep-seated issues within Nigeria’s foreign exchange system, prompting the need for a comprehensive investigation.

The Deloitte report revealed that a significant portion of the backlog, amounting to $2.4 billion, comprised false claims. In some instances, claimants were unable to provide valid import documents, while in other cases, entities making the claims were found not to exist.

“The result that came out of this was startling in a great respect. We discovered that of the roughly $7 billion, about $2.4 billion had issues, which we believe had no business being there, and the infractions on that ranged from so many things, for example not having valid import documents and in some cases entities that do not exist,” Cardoso said, expressing concern over the shady deals that were unearthed during the audit.

Cardoso revealed that not only did entities that didn’t exist receive allocations, but some entities received more than they initially requested, adding another layer of complexity to the already dire situation. In a startling admission, he stated, “Entities did not exist but got allocations. Entities who asked for FX got more than they asked. Entities that did not ask got allocations.”

The central bank governor said the CBN wrote to the authorized dealer to explain. Sadly, ‘much has not been disputed.’

Despite the alarming irregularities, Cardoso emphasized progress in addressing the FX crisis, revealing that $2.3 billion of the validly executed claims, including those from airlines, have been cleared. However, challenges persist as $2.2 billion of questionable claims remain unresolved. Cardoso expressed confidence in addressing these outstanding issues but admitted, “We have come to the end of the road.”

The revelation of these irregularities has added to the existing pressure on the naira, with concerns over its undervaluation. Cardoso stated that the naira remains undervalued, and emphasized the need for comprehensive measures to stabilize the currency.

The audit report raises concerns about the integrity of the foreign exchange system and the need for stricter oversight to prevent such incidents in the future. The implications of these invalid claims are severe, as they contribute to the existing pressure on the naira and exacerbate the challenges faced by the Nigerian economy.

Investors and currency users are now closely monitoring the central bank’s response to address the backlog and restore confidence in the foreign exchange market.

Anti-graft advocates said the uncovering of these false claims denotes the urgency for regulatory reforms and enhanced transparency within Nigeria’s financial system. Stakeholders are calling for accountability and swift actions to rectify the situation, ensuring the stability of the currency and fostering a transparent economic environment.

However, Cardoso expressed optimism about the future, assuring that the naira would stabilize. He said the CBN is confident that the issues will be addressed, assuring that the naira will stabilize. The assurance from the central bank governor aims to instill confidence in investors and the public, signaling a commitment to resolving the lingering FX crisis.