It appears that Korea’s semiconductor exports have decreased by about 45% to China. This was caused by the largest deficit since diplomatic relations between Korea and China. Relations between South Korea and China deteriorated in 2017 due to the deployment of the THAAD (High Altitude Area Defense) system, which also affected exports of semiconductors, Korea’s popular products. However, Korea’s semiconductor exports declined due to China’s recent economic recession caused by the COVID-19 pandemic and China’s reduction in imports of South Korean products, however, improved Korea-China relations in 2018. Accordingly, Korea’s total foreign trade, in which semiconductor exports play the biggest role, has been weakening recently. Competition in high-end semiconductor markets such as Korea is intensifying due to the development of China’s semiconductor industry, and Korea needs to make efforts to develop new technologies and secure export engines in the future. Due to uncertainties in the semiconductor market in China, Korean companies are preparing countermeasures such as diversifying export target countries and exploring new export markets. The decline is estimated to have been mainly due to uncertainties in the semiconductor market in China and trade disputes between the U.S. and China. As semiconductor producers entered the domestic market in China, import demand also decreased. Also, auto exports are also declining due to the slowdown in China.
As of April 2022, South Korean carmakers’ exports to China fell 36.3% year-on-year. This is mainly due to the slowing economy in China and falling demand due to the COVID-19 pandemic. Meanwhile, Korean companies are preparing countermeasures against these difficulties. For example, we are strengthening our competitiveness by exploring new export markets and configuring various product lineups. It is also considering reducing its dependence on China by diversifying importing countries. Korean companies are trying to overcome the current difficult times and prepare for the future through these countermeasures. Korean companies are preparing various countermeasures to cope with this situation. These companies are developing new product lineups to strengthen their competitiveness in the semiconductor market in China and are pushing to diversify into other export markets. In addition, we are making efforts such as increasing technological innovation and R&D investment in Korea. On the other hand, China’s imports of Korean products are decreasing significantly. China’s imports of South Korean products fell 26.4% year-on-year in the January-August period of 2021, the report showed. This is estimated to be due to factors such as a slowdown in the Chinese economy and a trade dispute with the United States. However, the demand for Korean products in China is still high. In particular, the demand for Korean products is high in China’s IT and automobile industries. Therefore, Korean companies are trying to further strengthen their presence in these markets. Meanwhile, the Korean government is preparing countermeasures against these problems.
South Korea and China have recently made efforts to strengthen bilateral economic cooperation and minimize trade barriers. Meanwhile, the Korean government is preparing countermeasures against these problems. South Korea and China have recently been trying to strengthen their economic cooperation. To this end, the Korean government is pushing for various policies to develop cooperative relations with China. For example, the Korean government is actively supporting Korean companies’ entry into China to solve the trade deficit with China. In addition, we are preparing measures such as improving the working environment of Korean companies in China and strengthening cooperation between governments. As these efforts are working, the profitability of Korean companies in China has recently been on the rise. Also, the Korean government is actively supporting technological innovation and R&D investment. This helps Korean companies maintain their competitiveness in the global market and develop new products. Finally, the Korean government is strengthening economic cooperation with China while maintaining economic relations with the United States. The Korean government is further strengthening economic cooperation with China, while at the same time maintaining economic relations with the U.S. and responding to trade disputes between the U.S. and China.
Sophia Kim
US ASIA JOURNAL
