Whilst the proportion of goods imported by Korea from China has been steady the proportion of goods imported by China from Korea has been falling.
This development is highlighted in a short brief from Jung Min Han and Jeong-Hyun Kim writing for the Korea Institute for Industrial Economics and Trade.
They note Korea’s proportion of exports to China peaked in 2018 at 26.8% but since has fallen to 19.7% in 2023. Moreover, China’s proportion of imports from Korea has fallen from a high in 2015 of 10.9% to 6.2% in 2023.
This development seems to be affecting Korea especially as the chart below highlights.
The researchers identify four factors at work:
- China is increasing its self-sufficiency in intermediate goods
- Korea has experienced an overall ‘structural’ weakness in exports to China
- The China market in general has been weak, reducing demand for all goods
- The global downturn in the I.T. sector has particularly affected the China-Korea dynamic
The report concludes Korea should try and cultivate more non-China business to replace the China losses.
That’s a great idea, but I wonder with whom they might progress such a strategy?
You can read the report in full via this link Korea’s Export Slump to China.
Happy Sunday.