Owing to China’s Need?
The Ministry of Trade, Industry & Energy announced on December 19 that the volume of bilateral trade between South Korea and China totaled US$217.5 billion from January to November this year, up 13.6% from a year ago despite the THAAD conflict, and South Korea’s exports to China increased 14.1% year on year to US$128.3 billion during the same period.
“Intermediate goods exports from sectors such as semiconductor and petrochemical, which benefit from the South Korea-China FTA, showed an increase of 19.2% whereas the rate of increase was 12.6% for those items not benefiting from the FTA,” the ministry explained.
During the period, South Korea’s imports from China totaled US$89.2 billion, up 12.9% from a year earlier, whereas South Korea’s total imports increased 18.2%. This means South Korea is now less dependent on imports from China than before. “China, which has continued to take up more than one-fifth of the South Korean import market since 2015, accounted for 20.4% of the market this year with the ratio on the decline,” the ministry went on to say.
From January to November this year, South Korea posted a trade surplus of US$39 billion with China, up 16.7% year on year. Meanwhile, South Korea’s investment in China and China’s investment in South Korea fell 20.2% and 63.4% from a year ago in the first three quarters of this year, respectively. The ministry explained that this was because of the Chinese government’s direct overseas investment restrictions.
“Based on the FTA, South Korea’s exports to China increased for the 13th consecutive month and each of the two countries is currently the number one player in the other’s import market,” the ministry mentioned, continuing, “We will keep trying to further expand the positive reciprocal effects of the FTA.”