Despite the Chinese government’s retaliation against South Korea for the deployment of the THAAD System, South Korea kept its first ranking in the Chinese import market in the first half of the year. However, South Korea’s share of China's import market fell to a single digit in three years, and its gap with second-ranked Japan, the second largest market, nearly disappeared. So, South Korea’s position is rather unstable.
According to a report titled "Evaluation of China’s Economy and Trade in the First Half of 2017 and an Outlook for the Second Half of 2017," released by the Beijing Branch of the Korea International Trade Association (KITA) on August 7, South Korea accounted for 9.4% of the Chinese import market in the first half of this year.
This is because the Korean semiconductor industry enjoyed a boom and petrochemical product exports rose sharply thanks to a hike in oil prices. However, the percentage is a drop from 10.4% in 2015 and 10.0% in 2016, respectively.
In particular, South Korea’s gap with Japan, the second ranker in the Chinese import market, narrowed down to 0.5 percentage points. Korea lost the number one spot to the US in March, and Japan in April and June.
Observing rates of changes in China's import market by nations in the first half of this year, Korea was the only nation that recorded a single-digit growth rate among the top five countries. However, China increased its imports from the countries that ranked second to fifth –- Japan (15.6%), the US (19.8%), Taiwan (10.4%) and Australia (55.8%).
Among major exports to Korea, semiconductors and petrochemicals jumped 47.5% and 19.2%, respectively, while flat panel displays, auto parts and wireless communication equipment slid 8.1%, 38.3% and 23.2%, respectively.
"Korean products are facing difficulties in the Chinese market due to the replacement of import countries due to the prolonged THAAD situation and Chinese policies to buy materials made in China," said Shim Yoon-seop, deputy director at the Beijing Branch of the Korea International Trade Association (KITA). “Intensifying competition is compelling Korea to make a change in advancement strategy.”