June 02, 2022 13:21
The proportion of China in Korea's total exports has fallen to the lowest since 2008. Korea continued to suffer a trade deficit as exports to China slumped.
Korea posted a trade deficit of US$1.7 billion in May, remaining in the red for a second month, the Ministry of Trade, Industry and Energy said on Wednesday.
This year's cumulative deficit until May amounted to $7.8 billion.
The main reasons are that the cost of energy imports skyrocketed due to sky-high international oil prices, while mass lockdowns in big Chinese cities like Shanghai and Beijing hit Korea's exports.
China took up only 23.4 percent in Korea's total exports in the January-May period, the lowest since 2008's 21.7 percent. The proportion surpassed 20 percent for the first time in 2005 and never dropped below 24 percent since 2009, peaking at 26.8 percent in 2018 and hovering at about 25 percent until last year.
Exports of petroleum products to China more than halved on-year in May, while shipments of general machinery and displays also decreased by about 20 percent.
Prof. Sung Tae-yoon of Yonsei University said, "We're not only taking a blow from turbulence in the global supply chain due to the lockdowns in big Chinese cities but also suffering dwindling exports."
Cho Kyung-yup of the Korea Economic Research Institute said, "We need to reduce dependence on China and instead explore more North American and European markets."
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