S. Korean financial firms most vulnerable to China shock: data

South Korean financial firms are the most vulnerable to an economic slowdown in China, with their exposure to the world's second-largest economy being the highest in the world, market data showed Wednesday.

Local banks and non-bank institutions' outstanding loans to China reached $24.5 billion as of end-March, accounting for 17.5 percent of their total overseas lending of $140 billion, according to the data.

South Korean financial firms' exposure is in stark comparison with those of other countries. Taiwanese financial firms' ratio was

10.4 percent, with the corresponding figures for Britain and Australia each being 5.1 percent and 3.3 percent.

In terms of total loans extended, Britain had the largest exposure to China, worth $181 billion, followed by the United States with $87.8 billion and Japan with $75.5 billion.

The Chinese economy is forecast to post around 6 percent growth for this year, the slowest pace in more than two decades, raising concerns that China's economic fallout could lead to a potential global recession.

Analysts called for thorough preparation for any fallout from the neighboring country to minimize the risks.

"Many investors have started warning of Chinese banks' financial soundness," said Suh Dong-pil, an analyst from Heungkuk Securities Co. "We have to keep cool-headed and monitor the Chinese economy." (Yonhap)