Cost of Doing Business
Last year, the shipment amount of the mining and manufacturing industries decreased. Also, one of the core industries, the electronics industry, showed lagging performance.
According to the report titled “Provisional Results of Mining Industry and Manufacturing Industry of 2014” published by the National Statistics Office on Nov. 26, the shipment amount of last year’s mining industry and manufacturing industry decreased by 0.3 percent (4.200 trillion won or US$3.637 billion) compared to the previous year, amounting to 1.490 quadrillion won (US$1.289 trillion). It has decreased for the last two consecutive years, starting from 2013 when the shipment amount began to drop again after the 1998 Asian financial crisis. shipment amount means the amount of money required to send products from an area of production to market. It can be said that this continuing decreasing trend is equal to the reduction of the manufacturing industry.
The shipment amount of the electronics industry amounted to 244.251 trillion won (US$211.309 billion), a decrease of 4.6 percent compared to the previous year. As far as the electronics industry is concerned, semiconductors such as DRAM and NAND Flash have increased by 8.4 percent compared to the previous year, amounting to 73.200 trillion won (US$63.349 billion), due to the increase in semiconductor demand. And surtax has increased 6.8 percent compared to the previous year, amounting to 44.200 trillion won (US$38.239 billion).
The shipment amount of electronics, including LCDs, decreased by 9.4 percent compared to the previous year due to a decline in the demand of panels and price, and surtax also decreased by 10.4 percent, amounting to 37.600 trillion won (US$32.5 billion). In total, the shipment amount and surtax recorded 69 trillion won (US$59.7 billion) and 27.4 trillion won (US$23.7 billion), respectively, a decrease of 8.7 percent and 8.2 percent compared to the previous year.
While the automobile industry’s shipment amount and surtax have increased owing to the improvement of component exports, that of the iron and steel industry have all declined resulting from the decline of raw materials and the influx of Chinese low price merchandise. The shipbuilding industry’s shipment amount (-1.3 percent) and surtax (0.9 percent) have all declined.
Also, while the shipment amount of petroleum refining (-4.4 percent), iron and steel (-4.1 percent), and chemistry (-2.2 percent) have all declined, that of the automobile industry (4.7 percent), mechanical equipment (3.1 percent), electric equipment (3.8 percent), and rubber and plastic (3.5 percent) have increased.
The mining and manufacturing industries’ surtax has expanded to 485.342 trillion won (US$419.791 billion), increasing by 0.8 percent compared to the previous year. The surtax of the chemical industry and light industry has increased by 0.2 percent and 4.4 percent each compared to the previous year.
In the meantime, according to the report titled “Corporate Loans, Late for Reflecting Business Circumstances’ by LG Economic Research Institute, debts of the shipbuilding industry, steel and iron industry, petrochemical industry, and shipping industry have increased for the last six years to 41 trillion won (US$35 billion).