June 07, 2023 11:33
Korean businesses are growing less dependent on China for their exports, a study shows. Exports to the U.S. and Vietnam are increasing as Korean producers diversify their markets.
According to the Korea International Trade Association on Monday, the dependence of Korean businesses on China for exports stood at 19.5 percent in the first quarter of this year, down from 25.9 percent in 2020.
Last year Korea's exports to China declined 4.4 percent while shipments to other markets increased 9.6 percent. In the meager first quarter of this year, Korea's exports to countries other than China dropped only 6.8 percent but shipments to China fell 29.8 percent.
The trend is noticeable across all industries. Since 2021, the dependence on China of Korea's secondary battery makers fell 5.5 percentage points to 4.3 percent, among petroleum products makers 10.3 percentage points to 7.6 percent, among petrochemical companies 4.2 percentage points to 35.5 percent, among steelmakers 3.1 percentage points to 10.1 percent, among auto parts makers 3.2 percentage points to 4.5 percent and among display makers 9.9 percentage points to 26.1 percent.
It edged down even among semiconductor makers (-0.5 percentage point), textile manufacturers (-0.9 percentage point) and home appliance makers (-0.9 percentage point).
Instead, exporters are turning to Australia, India, the U.S. and Vietnam. In the first quarter, their share in the U.S. import market stood at 3.59 percent, the highest level since 1990, while exports to Australia increased 8.8 percent led by petroleum products, the sharpest increase among Korea's top 10 markets.
Shipments to India were also strong focusing on petrochemical, steel, display, rechargeable batteries and plastic products, and to Vietnam in auto parts and displays.
Cho Eui-yoon at KITA said, "Vietnam accounts for a high proportion of intermediate goods exports from Korea but is becoming increasingly self-sufficient to resemble China. Korean companies must improve their technologies to gain an advantage in diversifying export markets."
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