Deteriorating Trade Conditions

Korea’s export volume decreased 7.99% in 2015 from a year ago but its ratio to the global total rose from 3.35% to 3.6%.
Korea’s export volume decreased 7.99% in 2015 from a year ago but its ratio to the global total rose from 3.35% to 3.6%.

 

According to the Ministry of Finance of Japan, the total Japan’s exports decreased 12.9% year on year to 5.3516 trillion yen in January this year. Although the exports began to fall in October last year, such a sharp decline was for the first time in 75 months. It was mainly attributable to a 17.8% decrease in its exports to the other Asian countries amid the slowdown of the Chinese economy. Besides, its imports showed a decline of 18%, continuing to fall for the 13th consecutive month. This was because of plummeting oil prices above all things.

Likewise, China’s exports and imports decreased by 11.2% and 18.8% from a year ago, respectively. Korea’s exports nosedived by 18.5% during the same period, showing the highest rate of decrease since August 2009. The size of international trade is shrinking on the part of Singapore, India, Indonesia and many other Asian countries as well. Maersk CEO Nils Smedegaard Andersen recently said that today’s international trade conditions are even worse than those during the global financial crisis of 2008.

According to the Wall Street Journal, this contraction of international trade is rooted in a decline in corporate investment and household consumption ignited by the ongoing economic slump. Although the European and U.S. economies are showing some positive signs, these have more to do with domestic consumption than exports.Meanwhile, a number of countries around the world are limiting trade as jobs in themselves are being threatened by the economic downturn. Reuters recently reported that the size of international trade, which had grown about three times faster than the global economic growth between 1950 and 2008, maintained a growth rate similar to that of the global economy after 2008 and is likely to fall short of it this year. The World Trade Organization’s estimate for this year’s trade growth is 3.9% but the actual result is likely to be lower than that.

In the meantime, Korea recorded total exports of US$526.9 billion last year to move up a notch to sixth in the world for the first time in five years. Korea’s export volume decreased 7.99% from a year ago but its ratio to the global total rose from 3.35% to 3.6%. It was China that was on the top of the list of major exporting countries last year with a total of US$2.2749 trillion.

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