U.S. Demand Growth Drives Korea's Export Recovery in 2H20
The Bank of Korea announced on June 16 that the U.S. demand for South Korean products led South Korea’s export recovery in the second half of last year and China’s contribution substantially increased in the first quarter of this year.
“The contribution of the United States as a final export destination peaked in the fourth quarter of 2020 and decreased in the first quarter of this year, when that of China exceeded that of the United States,” the central bank explained, adding, “Specifically, their respective contributions dropped from 9.3 percent to 3.6 percent and then to 0.4 percent and rose from 0.5 percent to 2.5 percent and then to 3.8 percent from the third quarter of 2020 to the first quarter of this year.”
The central bank also explained that non-IT products accounted for most of the U.S. demand with regard to a recovery in consumption and inventory stockpiling, whereas IT products accounted for most of the Chinese demand with regard to recovering consumption and investment.
The final export destination can be defined as the end user that uses an exported product. For instance, finished product export to the United States following half-finished product export from South Korea to Vietnam is export to Vietnam on a customs clearance basis while the destination is the United States.