First Trade Deficit since 1994
The Ministry of Trade, Industry and Energy announced on June 2 that exports from South Korea to China were US$13.41 billion (up 1.2 percent year on year) and exports from China to South Korea were US$14.51 billion (up 33.4 percent) last month. South Korea’s trade deficit with China was US$1.1 billion in that period, which is South Korea’s first trade deficit with China since August 1994.
This year, South Korea’s trade surplus with China was US$200 million, US$2.64 billion, US$3.03 billion and US$620 million in January to April, respectively. Last year, its surplus with China was US$24.28 billion, second only to its surplus with Vietnam (US$32.76 billion) by country.
Last month, China’s steel exports to South Korea jumped 51.4 percent, followed by semiconductor (43.6 percent), general machinery (28.2 percent) and textile (26.8 percent). According to the ministry, the steel imports increased a lot with the construction sector recovering from COVID-19.
“The deficit with China is worrying in that China accounts for one-fourth of South Korea’s total exports,” an expert said, adding, “The South Korean government needs to seek measures in that a rapid rise in energy and food prices is no longer the only cause of the shrinking trade surplus.”