The Korea Customs Service announced on February 22 that Korea’s exports totaled US$58.7 billion between January 1 and February 20 this year, down 18.3% from a year ago, and the amount for February fell 17.3% year on year to US$22.16 billion. The value of exports dropped year on year for the 13th consecutive month in January.
According to the World Trade Organization (WTO), Korea’s exports reached US$36.623 billion in January this year, 18.8% less than a year earlier. The rate of decrease is higher than those of China (11.2%), Japan (12.8%), Taiwan (12.9%), India (13.6%) and Brazil (17.9%).
To compound the matter, Korea’s export conditions are becoming worse and worse. Its exports showed a decline of 8% last year while the rate of decrease went up from 3.0% to 7.3%, 9.5% and then to 11.9% in the respective quarters. In particular, the decline in the export to China, which accounts for approximately 25% of the total exports, increased from 6.8% to 16.5% and then to 21.6% between November last year and last month.
Things are showing no signs of getting better, either. This is because the global trade itself is shrinking. According to the WTO, the amount of global trade decreased 11.8% to US$30.544 trillion last year. The year-on-year decrease was second only to that of 2009, when the decrement had amounted to 22.5%.
“One of the most important factors of the rapid decline in Korea’s exports is the decline in global trade attributable to the expansion of the use of domestically-produced components and materials by Chinese enterprises,” said Lee Ji-seon, senior research analyst at the LG Economic Research Institute, continuing, “This year, Korea’s exports are likely to show a negative growth of 1% to 2% from a year ago.”