S.Korea's economy no longer supported by China: BOK head

[beijingwalker]

S.Korea's economy no longer supported by China: BOK head​

May 23 2023

The port of Busan, South Korea’s trade hub (Courtesy of News1)

South Korea’s central bank chief said on Monday the local economy is no longer supported by China given the sustained decline of its exports to the mainland.

Korea’s shipments to China are on course to drop for a 12th straight month in May, according to customs data.

“Many Chinese businesses are manufacturing intermediate goods, which we mainly export," Bank of Korea Governor Rhee Chang-yong remarked on the slump in a meeting with lawmakers. “The decade-long support from the Chinese economic boom has disappeared.”

“Our competitiveness became weaker compared with the past. Securing competitiveness against China over the mid- to long term is a critical issue.”

Rhee said other Asian countries such as Japan and Vietnam suffered similar problems as they sold industrial products to China.

Korea’s exports to China made up 19.5% of its total overseas sales volume in the first quarter, falling below the 20% mark for the first time since 2005, according to the Korea International Trade Association.

TO FALL FOR 12TH STRAIGHT MONTH

Sales by Korea to its neighbor skidded 23.4% in the first 20 days of this month from a year earlier, separate data from the Korea Customs Service showed. The country’s shipments to China have been falling since June 2022.

Total exports dropped 16.1% to $32.4 billion during the May 1-20 period, with shipments to Vietnam and Japan down 15.7% and 13.9%, respectively. Sales to the US dipped 2% over the same period.

Overseas sales of microchips, Korea’s top export item, slumped 35.5%. The country is home to the world’s two largest memory chipmakers, Samsung Electronics Co. and SK Hynix Inc.


Imports slumped 15.3% to $36.7 billion, resulting in a trade deficit of $4.3 billion. That ramped up the cumulative trade shortfall to $29.5 billion so far this year, more than 60% of 2022's total deficit.

Such a shortfall is expected to hurt the country’s current account, Rhee said.

“The trade account is expected to suffer a deficit of some $30 billion this year. But the current account is likely to see a surplus of $24 billion to $26 billion over the impact of other industries such as tourism,” he said. “That still compared with a surplus of some $80 billion in the heyday.”

The country reported a current account surplus of $85.2 billion in 2021 and $75.9 billion in 2020, according to the BOK.

S.Korea's economy no longer supported by China: BOK head - KED Global

South Korea’s central bank chief said on Monday the local economy is no longer supported by China given the sustained decline of its exports to the mainl

www.kedglobal.com

 

[S10]

For a while China tried to foster an economic bloc between itself, Japan and South Korea by leaving some market segments alone. Since Japan and South Korea decided to be a part of US containment efforts, China no longer needed to accommodate them in the national economic plan.

China–Japan–South Korea Free Trade Agreement - Wikipedia

en.wikipedia.org

Now China will slowly squeeze them out of shipbuilding, automotive and semiconductor sector in the next decade.

 

[etylo]

Both South Korea and Japan can take hikes in the Pacific Ocean to US west coast instead since these two are firmly in US camp now blocking and spearheading against China in US's containment strategy of China.

 

[beijingwalker]

S.Korea's fast growth was mainly supported by China alone in the past 2 decades, it's exports to China accounted for more than a third of their total, now the good old days are over.

 

[Viet]

Betting on a single customer in this case China is always risky. But Korea is not alone, lots of countries report shrinking sales to China.
The only exception is Putin’s Russia cheap oil and gas. Korea shall increase trades with ASEAN bloc.

 

[IblinI]

Betting on a single customer in this case China is always risky. But Korea is not alone, lots of countries report shrinking sales to China.
The only exception is Putin’s Russia cheap oil and gas. Korea shall increase trades with ASEAN bloc.

I know mr viet, you are in love with korea, but do make sure to checked their trade statics. Your love is not doing great.
but your hated one China is doing great on trade.

 

[etylo]

Betting on a single customer in this case China is always risky. But Korea is not alone, lots of countries report shrinking sales to China.
The only exception is Putin’s Russia cheap oil and gas. Korea shall increase trades with ASEAN bloc.

But, ASEAN countries trade with China have increased a lot since the installment of RCEP.

 

[S10]

I know mr viet, you are in love with korea, but do make sure to checked their trade statics. Your love is not doing great.
but your hated one China is doing great on trade.

Realistically nobody is doing too great in Asia at the moment. China's youth unemployment and domestic consumption figures are both terrible at the moment.

 

[Viet]

I know mr viet, you are in love with korea, but do make sure to checked their trade statics. Your love is not doing great.
but your hated one China is doing great on trade.

Mr Iblini (what does it mean?), you misunderstand. I am not in love with Korea. Where you get this impression? If anything my 2 favorite countries are Swiss and Singapore. If getting old I will retire there. Or in Vietnam. I don’t hate China, either. I never said that.
Korea is doing great in my opinion. Economy growing at healthy rate. You can check the stats. Shrinking exports to China will not doom Korea. If true then Germany will doom too because less exports to China.

 

[zhxy]

Mr Iblini (what does it mean?), you misunderstand. I am not in love with Korea. Where you get this impression? If anything my 2 favorite countries are Swiss and Singapore. If getting old I will retire there. Or in Vietnam. I don’t hate China, either. I never said that.
Korea is doing great in my opinion. Economy growing at healthy rate. You can check the stats. Shrinking exports to China will not doom Korea. If true then Germany will doom too because less exports to China.

You are correct. Shrinking exports to China will not doom Korea. Korea has a diversified economy and is not overly reliant on any one export market. .

While shrinking exports to China would certainly have a negative impact on the Korean economy, it would not be a fatal blow. Korea has the resources and the resilience to weather this storm.

In fact, Korea has already begun to diversify its export markets. In recent years, Korea has been increasing its exports to Southeast Asia, India, and other emerging markets. This diversification will help to insulate Korea from future shocks to its export market.

In addition, Korea is also working to develop its domestic economy. The Korean government is investing in infrastructure, education, and research and development. This investment will help to create new jobs and boost economic growth.

 

[Viet]

You are correct. Shrinking exports to China will not doom Korea. Korea has a diversified economy and is not overly reliant on any one export market. .

While shrinking exports to China would certainly have a negative impact on the Korean economy, it would not be a fatal blow. Korea has the resources and the resilience to weather this storm.

In fact, Korea has already begun to diversify its export markets. In recent years, Korea has been increasing its exports to Southeast Asia, India, and other emerging markets. This diversification will help to insulate Korea from future shocks to its export market.

In addition, Korea is also working to develop its domestic economy. The Korean government is investing in infrastructure, education, and research and development. This investment will help to create new jobs and boost economic growth.

Export is just a figure among other figures in economic terms. Korea economy performs much better than most of countries in Europe. Look at UK economy. If people want to see how a dark picture can be. Never good to pursue an economic nationalism. Brexit is a dead end.

 

[beijingwalker]

You are correct. Shrinking exports to China will not doom Korea. Korea has a diversified economy and is not overly reliant on any one export market. .

While shrinking exports to China would certainly have a negative impact on the Korean economy, it would not be a fatal blow. Korea has the resources and the resilience to weather this storm.

In fact, Korea has already begun to diversify its export markets. In recent years, Korea has been increasing its exports to Southeast Asia, India, and other emerging markets. This diversification will help to insulate Korea from future shocks to its export market.

In addition, Korea is also working to develop its domestic economy. The Korean government is investing in infrastructure, education, and research and development. This investment will help to create new jobs and boost economic growth.

Of course it won't doom Korea but Korea is getting a hit hard, probably will turn into a net trade deficit nation from this point onward

Trade Deficit Increasing Rapidly

The Korea Customs Service announced that South Korea’s exports for the first 10 days of this month totaled US$15.791 billion, down 16.2 percent from a year ago

www.businesskorea.co.kr

South Korea’s US$60 billion China trade swing due to ‘shrinking tech advantage’

South Korea recorded a trade deficit of US$5.1 billion with China in January and February, which was the highest among all its trading partners, with an analyst pointing to its shrinking “technological comparative advantage”.

www.scmp.com

 

[jhungary]

Export is just a figure among other figures in economic terms. Korea economy performs much better than most of countries in Europe. Look at UK economy. If people want to see how a dark picture can be. Never good to pursue an economic nationalism. Brexit is a dead end.

I honestly don't know why they think it is good for China when South Korea economy going independent from China.

Most EU country have strong ties (not even dependence, maybe for gas and oil) in Russia, and it burn them pretty good when that singular dependency exploded. And you are talking about a dependence here.

It's NEVER a good thing for any country to depends on a singular market. You don't really need to study economy to know that. You always have an alternative (or better yet, alternative to the alternative) and a backup plan, you always divert your investment to lower the risk management.

Now, here is something you will learn from economic classes. While market depends on supplies and demand, demand always, again, ALWAYS, trump supply. Because trading is a logical action. As a buyer, you don't buy more because your supplier offers more, you buy more because you need more. On the other hand, if you are a producer, you don't produce more because you have the capability to do so, you produce more because there is more demand of said product. Hence Demand ALWAYS trump supplies.

Of course it won't doom Korea but Korea is getting a hit hard, probably will turn into a net trade deficit nation from this point onward

Trade Deficit Increasing Rapidly

The Korea Customs Service announced that South Korea’s exports for the first 10 days of this month totaled US$15.791 billion, down 16.2 percent from a year ago

www.businesskorea.co.kr

South Korea’s US$60 billion China trade swing due to ‘shrinking tech advantage’

South Korea recorded a trade deficit of US$5.1 billion with China in January and February, which was the highest among all its trading partners, with an analyst pointing to its shrinking “technological comparative advantage”.

www.scmp.com

Again, you have misused the term "trade deficit" it did not mean the way you mean in this sense.

And South Korea has been in Trade Deficit mostly since 2020.

 

[Paji]

S.Korea's fast growth was mainly supported by China alone in the past 2 decades, it's exports to China accounted for more than a third of their total, now the good old days are over.

Well, if you believe that, you must also believe that China's fast growth was supported mainly by the US, EU and Japan and the good old days are over for China as well.

 

[jhungary]

Well, if you believe that, you must also believe that China's fast growth was supported mainly by the US, EU and Japan and the good old days are over for China as well.

In his dream, yes, he really do believe South Korea was supported alone by China.....

In reality