SEOUL: South Korea’s exports to China will face pressure in the near future due to China’s industrial upgrading and its exploration of multiple import sources, although the two countries could improve economic and trade relations in the long run, experts noted. South Korea’s presence in the Chinese import market is shrinking and is likely to fall below 10 percent this year, despite its strong exports to China led by semiconductors and petrochemicals, the Yonhap News Agency reported on Tuesday. Statistics from the Korea Center for International Finance and the South Korean trade industry showed that South Korean products accounted for 9.4 percent of China’s imports by value from January to August this year, down from 10.4 percent and 10 percent in 2015 and 2016, respectively. China’s imports of consumer goods from South Korea decreased except for a handful of products despite a rise in demand for similar goods from other countries, Yonhap said, citing a report from a trade group.
South Korea accounted for 3 percent of all consumer goods imported by China during the January-July period this year, according to a report released by the Beijing office of the Korea International Trade Association on Tuesday. Detailed data for the top 20 consumer products showed that global shipments to China during the period increased in terms of value, including autos, headphones and earphones, deli food and other items. But declines were seen for similar South Korean goods, said the report. While China’s car imports rose 3.2 percent year-on-year during the first seven months of 2017, no imports were recorded for South Korean automaker Hyundai, data from the China Automobile Dealers Association (CADA) showed in September. Beijing Hyundai Motor Co, the joint venture of China’s BAIC Motor Corp and its South Korean partner Hyundai Motors, suffered from a sales decline during the first half year. The venture sold only 361,000 cars during the period, down 29 percent compared with a year earlier and its revenue fell 52 percent to 4.57 trillion won ($4 billion), media reports said. “Most of the imported South Korean auto components are intended for the locally manufactured vehicles of the JV, the sales of which have a direct effect on the former,” Wang Cun, a deputy director of the committee overseeing imported cars at CADA, told the Global Times on Wednesday. “Components manufactured in China are often substituted for imported ones as vehicle prices are falling amid fierce competition in the auto industry,” Wang noted. However, imports from South Korea rose for cosmetics, shoes, beer and roasted coffee during the January-July period, according to the Yonhap report.
South Korea is the top import source for China at $690 million in terms of cosmetics, equal to 28.5 percent of China’s total imports of cosmetics, said the report. A services employee, who asked to remain anonymous, with a Beijing-based company mainly focused on the import of South Korean cosmetics for years, spoke with the Global Times on Wednesday. “The advantages of South Korean cosmetics – high quality and low price – cannot be ignored. Yet I have to say that the tensions between the two countries caused by the THAAD [Terminal High Altitude Area Defense] deployment have affected our business,” the employee said. “Chinese customs became stricter in checking the products, which delays deliveries, so our customers often have to wait longer,” the employee added. “The two sides should conduct more cooperation projects along the industrial chain to seek joint development instead of relying on a pure complementary mode,” Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Wednesday.”With a comprehensive heavy chemical industry as its backbone, South Korea is a good trading partner but it should take a far-sighted view when trading with China – not just as a supplier anymore, when what we really need is mutual cooperation,” Bai suggested. Although the THAAD issue has had a lingering impact on bilateral trade, the situation won’t change too much in the long run because it would be highly costly to adjust it, he said.
