News & Notice

News & Notice
Subject Korea’s increasing exports to US and Vietnam and its decreasing exports to China Date 2016-11-02 09:39:34
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Korea’s increasing exports to US and Vietnam and its decreasing exports to China


-Analysis on Korea’s exports to top 3 export destinations-


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It appears that Korea needs new strategies in rearrangement of export destinations as Korea’s recent exports are increasing to the U.S. and Vietnam while those to China are decreasing.


According to a report titled “The Changes in Exports to Korea’s top 3 Export Destinations” issued by the Institute for International Trade (http://iit.kita.net, President, Kim Geuk-soo), Korea’s exports to the U.S. and Vietnam have increased since 2010 whereas the exports to China have been decreased. The report analyzes that the causes of the increase of Korea’s exports to the U.S. from 10.7 percent in 2010 to 13.8 between January and August this year are improved import demands in the U.S. due to its economic recovery and vibrant domestic market activities that have led brisk exports of consumer goods to the country. Since the U.S is importing relatively higher volume from other countries compared to other advanced countries, the exports of the EU and Japan to the U.S. are also showing upward trends.


On the other hand, Korea’s exports to China have dropped from 26.1 percent in 2013 to 24.4 percent between January and August this year. The report states that China’s policy changes to focus on domestic demands have resulted in the country’s slow economy as well as the decrease of China’s exports to the global market and they have had negative impact on the other countries’ exports to China. Other Asian countries such as Indonesia and Thailand whose exports heavily depend on China are experiencing the same situation. Unlike Korea, the exports of advanced countries, including the U.S. and the EU, to China are increasing as the expansion of Chinese domestic market has led growing demands for consumer goods in high quality, safe and good design.


Meanwhile, Korea’s exports to Vietnam are displaying the continuous upward trends based on the virtuous network of production and export led by the increased foreign direct investment.


The report forecasts that the changes in exports to those three countries will continue for a while. It is expected that along with the a solely growing US market, the exports to Vietnam, which is emerging as the second production base to replace China, will go up. However, the report anticipates that despite of the fact that Korea’s exports of consumer goods are skyrocketing, it will be difficult to experience the favorable export environment in China as China’s growth rate is slowing down and trade structure is changing.


Shim Hye-jung, a researcher at the IIT said “Korea’s export volume to the U.S. and Vietnam is still behind its exports to China. However, as Korea’s exports become less dependent on China and its exports to Vietnam will be likely to rise.” She added “Like the U.S. market, China’s import demands for consumer goods are increasing. Therefore, it is required to develop export expansion strategies for high-end consumer goods with brands.”



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