Chinese Consumers Tightening Purse Strings
The Korea International Trade Association (KITA) announced on Jan. 23 that consumer goods exports from South Korea to China added up to approximately US$5,509 million last year. For reference, the value was US$4,687 million in 2017 during China’s THAAD retaliation and US$7,021 million in 2016 before the retaliation against South Korea.
Korea’s consumer goods exports to China are likely to drop again this year as the Chinese economy is slowing down and Chinese consumers are tightening their purse strings.
For example, China’s year-on-year retail sales growth, which amounted to 13.7 percent in November 2013, fell to 8.1 percent in November 2018, falling short of market expectations by a margin of 0.7 percentage point and hitting a new low since the global financial crisis of 2008. The year-on-year growth was 9.1 percent from January to November last year whereas it was 10.3 percent during the same period of the previous year.
It is South Korean cosmetics manufacturers that are likely to take the biggest hit. The impact, in fact, appeared last month, when cosmetics exports from South Korea to China fell approximately 4 percent from a year earlier to US$145 million.