Shrinking Trade

 

Although South Korea reached 1 trillion won (US$904 million) in yearly trade this November, trade with China, Japan, and the E.U. decreased. Concerns over the export decrease are getting bigger due to a weak yen and the slowdown of the Chinese domestic market.

The Ministry of Trade, Industry and Energy (MOTIE) said in its report titled November Export and Import Trend (tentative) on Dec. 1 that exports reached US$46.99 billion, down 1.9 percent from a year ago. Imports recorded US$41.384 billion, down 4.0 percent compared to that of same period of last year. The trade balance reached a surplus of US$5.66 billion, continuing a trend for 34 consecutive months.

Although the exports and imports of November decreased, South Korea's trade surpassed US$1 trillion at 13:07 on Nov. 28. This year, it reached the trade amount of US$1 trillion for the shortest time in the year for 4 consecutive years since reaching the landmark in 2011. Head of MOTIE trade investments Kwon Pyeong-ho said, “South Korea's total export growth rate this year increased amid the declining growth rate of global trade.” adding, “If this trend continues, the country is expected to achieve the best performances in trade size, export amount and trade surplus.”

However, the problem is that exports and imports might worsen due to the recent state of the global economy. Above all, South Korea's trade performance with the top four trade partners, except the U.S., is slow. Although exports to Japan decreased by -2.2 percent in Oct, they declined sharply by -24.2 percent, or one quarter of total trade amount, in Nov. Trade with China also decreased -3.2 percent, and that of the E.U. has recorded negative growth for 3 months in a row since September.

Imports on capital goods and consumer goods increased, but the decrease in imports of raw materials due to a drop in oil prices resulted in an overall import decline.

Consequently, both exports and imports in November decreased for the first time since January this year.

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