"Korea's Export Growth Rate Slows Since Financial Crisis... Impact of China's Slowing Growth"

Bank of Korea to Release 'Monthly Survey and Statistics Report' on 29th

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] Since the 2008 global financial crisis, South Korea's export growth rate has gradually slowed. After the global financial crisis, the export growth rate was only 1.9%, dropping 8.5 percentage points from the previous rate of 10.4%.

According to the report titled "The Impact of Changes in South Korea's Participation in the Global Division of Labor System on Our Exports," published in the Bank of Korea's Monthly Survey of Economic Statistics on the 29th, the slowdown in import demand due to economic downturns in major countries was found to have the greatest effect. It is also estimated that the negative impact of changes in the global division of labor system contributed to some extent.

In particular, the contribution of global final demand sharply declined from 10.8 percentage points to 1.4 percentage points. This acted as a factor accelerating the slowdown in South Korea's export growth rate.

Changes in the global division of labor system also acted as a negative factor. Before the financial crisis, it was a positive factor for South Korea's exports, but after the financial crisis, it became a negative factor for exports.

By trading partner country, the slowdown in China's growth had the greatest impact, and among expenditure items, the negative effect of sluggish investment demand was prominent.

The report forecasted that structural changes would accelerate due to movements to secure the stability of intermediate goods supply chains caused by the impact of the novel coronavirus infection (COVID-19), the continuation of protectionist trade policies, and technological advancements related to the Fourth Industrial Revolution.

In this regard, the research team emphasized, "It is necessary to actively participate in regional and extraregional trade agreements to minimize the negative effects of trade barriers," and "It is essential to discover new growth engines, enhance the competitiveness of key export items, and diversify intermediate goods supply chains such as materials and components."

This content was produced with the assistance of AI translation services.