Agence France Presse

Seoul, May 3:

South Korea’s highest economic official voiced cautious optimism today over China’s efforts to rein in its overheating economy, saying the country’s domestic demand would remain robust.

Finance and economy minister Lee Hun-Jai said South Korea should not overreact to China’s ‘pre-emptive’ measures to cool down its economy.

“Such measures are designed to prevent a crash-landing,” he said, adding the Chinese economy was expected to grow by eight per cent this year. Chinese premier Wen Jiabao’s remarks last week that Beijing would take strong measures to cool down the mainland economy sparked a sell-off in the region.

Lee, however, said preventing sharp growth in China could help South Korea’s economy in the long run. “Yet we must not be complacent because of our high dependence on the Chinese market,” he said. South Korean share prices rose by 0.38 per cent today to close at 866.11, ending a five-day long losing streak.