BSI for Market Outlook, Sales, Costs Worsens

More than half of Korean companies operating in China say the ongoing U.S.-China trade disputes are adversely affecting their business.

More than half of South Korean companies currently doing business in China answered in a recent survey that the ongoing trade disputes between the United States and China are adversely affecting their business.

The survey covering 212 companies was conducted from Sept. 2 to 27 by the Beijing office of the Korea Chamber of Commerce and Industry, the Korea Institute for Industrial Economics & Trade (KIET), and the Korea Chamber of Commerce in China.

The survey is based on questions related to their business performance, sales, costs, business environments, difficulties, and so on and each item-specific result is shown in the form of a business survey index (BSI) value of 0 to 200, in which a value exceeding 100 means more than 50 percent of the survey respondents gave a positive answer and vice versa.
 

The 212 companies’ BSI for the third quarter of this year is 82 as in the previous quarter when it comes to their market outlook. However, the sales BSI fell two points quarter on quarter to 87.

As for costs, those indicating labor costs, raw material purchase costs and capital expenditures fell from 138 to 136, from 122 to 114 and from 104 to 99, respectively. Especially, the last item dipped below 100 for the first time since the first quarter of 2016.
 

The ratio of those that mentioned the adverse effects of the trade disputes rose from 33 percent in the third quarter of 2018 to 51 percent in the third quarter of 2019. Meanwhile, the ratio of those answering that they are not being affected by the disputes fell from 62 percent to 47 percent.

In the former group of respondents, 56 percent said that the disputes have resulted in a slowdown of the Chinese economy and a decline in local demand, 23 percent mentioned a decline in exports to the United States attributable to U.S. economic restrictions against China, and 14 percent answered that the conflict has adversely affected the demand side of the international trade market.

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