October 19, 2016 11:26
Korea's exports of IT parts are suffering as China moves to reduce dependence on foreign suppliers for key components.
The Ministry of Trade, Industry and Energy on Tuesday said Korea's exports of industrial parts and materials to China fell 13.2 percent on-year in the first nine months of this year to US$60.4 billion.
Industrial parts and materials account for 70 percent of Korea's total exports to China, and a failure by Korean manufacturers to find alternative markets or products could lead to disastrous results. Exports of electronics parts to China plunged 18.7 percent, the biggest decline.
China is investing heavily to boost production of semiconductors and other IT components within its borders. Exports of chemical products to China fell 10.1 percent due to excess supply there.
"We need to bolster research and development on industrial parts and materials to create products that are superior to those made in China," said Han Jae-jin at Hyundai Research Institute. "We also need to lower our dependence on exports of intermediate goods to China and boost sales of consumer goods there."
Meanwhile, Korea's imports of Japanese industrial parts and materials, which had been declining until last year, have risen again.
Japanese industrial parts and materials accounted for 16.5 percent of Korea's imports of such goods last year, a record low, but that has risen again to 17.6 percent this year.
"Due to the economic slump, overall imports slowed, but imports of core Japanese industrial parts and components increased steadily because they're hard to replace," said Moon Byung-ki at the Korea International Trade Association.
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