Two-way Drop
South Korea’s share of China’s total imports descended to the low 6 percent range.
According to data from the Chinese government, South Korea’s exports to China in the first half of this year totaled US$77 billion, down 24.9 percent from the same period of 2022.
During the same period, China’s total imports amounted to US$1.2547 trillion, of which imports from South Korea accounted for 6.1 percent. This is a drop of 1.5 percentage points from 7.6 percent in the first half of last year.
In one year, South Korea’s ranking dropped from second place to fifth. In the first half of last year, it ranked second (7.6 percent) in China’s total imports, behind first-place Taiwan (9.1 percent). Japan (6.9 percent), the United States (6.8 percent), and Australia (5.2 percent) followed South Korea by taking third to fifth places.
However, in the first half of this year, the order was changed with Taiwan (7.3 percent), the United States (7.0 percent), Australia (6.4 percent), Japan (6.2 percent), and South Korea (6.1 percent).
China’s imports from South Korea shrank by 6.7 percent lower in the first half of this year compared to last year while South Korea’s exports to China fell by 24.9 percent, the sharpest among 23 major countries and regions in the Chinese government’s classification, leading to South Korea’s fall through the rankings.
The drop in the proportion of China’s imports from South Korea in its total imports has been more noticeable since China’s retaliation against South Korea for the latter’s deployment of the THAAD system in 2017. In 2016, before the Chinese retaliation, South Korea’s percentage stood at 10 percent, but it fell to 9.6 percent in 2017, 9.6 percent in 2018, 8.4 percent in 2019, 8.4 percent in 2020, 7.9 percent in 2021, and 7.4 percent in 2022.
Major South Korean companies such as Samsung Electronics and Hyundai Motor suffered significant sales declines mainly in core consumer goods such as smartphones and automobiles in China following the THAAD retaliation.
According to CEO Score Research Institute, which examined six years of sales of 113 of Korea’s 500 largest companies, excluding battery and semiconductor sales, their sales shrank by 37.3 percent to 73.4485 trillion won in 2017 from 117.23 trillion won in 2016.
Sales at Hyundai Motor’s Chinese subsidiary plunged by 75.7 percent, or 15.28 trillion won, from 20.1287 trillion won in 2016 to 4.9003 trillion won in 2022.
A slump in Korea’s exports to China, which have continued since last year, has been pointed out as the main culprit behind South Korea’s overall export slump and lingering trade deficit. According to the Korean Ministry of Trade, Industry and Energy, South Korea’s monthly growth rate of exports to China remained in the negative for 13 months from June 2022 to June 2023. Its trade deficit with China has also been continuing for nine months since October 2022. This year, its cumulative trade deficit with China reached US$12.92 billion through May 25, accounting nearly half of its total trade deficit of US$28.14 billion.