South Korea’s industrial component and material exports to China showed a significant decline in the first quarter of this year as the latter is trying to replace imported ones with domestically produced ones. During the period, South Korea’s dependence on industrial materials and components imported from Japan hit an all-time low as far as Q1 figures are concerned.
The Ministry of Trade, Industry & Energy announced on April 13 that South Korea’s industrial component and material exports and imports totaled US$59.4 billion and US$36.3 billion in Q1, respectively. Last year, South Korea recorded a trade surplus of US$105.1 billion in the sector, posting a trade surplus of more than US$100 billion in it for the second consecutive year.
The exports from the sector accounted for 51.2% of the country’s total exports in Q1, 2016, when the exports and imports decreased by 10.9% and 10.7% from a year ago, respectively. Component exports edged up with regard to computers and office machines but declined in the other segments including electronic components. The amount fell 10.5% from a year earlier.
The exports to China (14.8%), Europe (2.6%), Japan (2.5%) and Latin America (29.1%) declined whereas those to Vietnam (16.7%) and the United States (0.2%) increased. At present, China is aiming to raise the ratio of domestically produced key components and materials in use to at least 80% by 2020.
South Korea’s reliance on Japanese components and materials reached 17.0%, the lowest Q1 figure, in the first quarter of 2016. The percentage had been 23.8% in Q1, 2011, 23.3% in Q1, 2012, 21.5% in Q1, 2013, 18.2% in Q1, 2014 and 17.2% in Q1, 2015.