SEOUL: South Korea is enjoying strong growth in exports to China, with the latest data for May showing a 7.5% increase on the year.
So does this mean the two countries have overcome their disagreement over Seoul’s deployment of a U.S. missile defense system? A closer look at trade and tourism data offers an answer: Not exactly.
The jump in May was the seventh straight on-year increase, according to data from the Korea Customs Service. The winning streak follows export declines that lasted for 16 consecutive months through October.
Semiconductors account for much of the growth. In May alone, shipments soared 67%.
China is dependent on South Korean components — chips included — for smartphones and other consumer electronics. When Chinese smartphone sales are brisk, imports from its neighbor tend to grow, too, regardless of the political relationship.
Outside of semiconductors, however, the countries’ economic ties remain strained.
South Korean exports of cosmetics to China are down 87% for the first five months of this year, according to the Korea International Trade Association.
Total exports to China are up 14% over the same period, but that pace is slower than the country’s overall export growth, which came in at 16.3%.
“Exports to China are growing, but they are not driving Korea’s export growth,” said Hidehiko Mukoyama, an analyst at the Japan Research Institute.
China is strongly opposed to the deployment of the U.S. Terminal High Altitude Area Defense system, known as THAAD. Beijing fears the system’s radar will be used to monitor its military activities. Seoul, on the other hand, says THAAD is a purely defensive system designed to counter the threat of missiles from North Korea.
