Yet, Korea’s Exports Continuing to Increase
Global supply chain risks are threatening the South Korean economy, although South Korea’s exports are continuing to increase and recently reached the highest level since records began in 1956.
The risks that arose with the outbreak of COVID-19 are taking the forms of automotive chip shortage, cargo handling delay at ports, rapidly rising raw material prices, power shortage in China, etc. These are fatal to the South Korean economy, which is highly reliant on trade.
The South Korean government held a strategy meeting on these issues on Oct. 18. There, Deputy Prime Minister Hong Nam-ki remarked regarding the U.S. demand for semiconductor manufacturers’ data that the government would deal with it in view of corporate autonomy, government roles and the partnership between South Korea and the United States.
At present, South Korean automakers are being affected by the chip shortage and the cargo handling delay is affecting a large number of exporters. If this continues, even South Korea’s exports may decline along with its manufacturing output and economic growth rate. Besides, the South Korean economy as a whole may be shaken if the U.S. and Chinese economies begin to slow down. Last month, South Korea’s exports to China and the United States accounted for 28 percent and 15 percent of its total exports, respectively.