"Korea Focuses Trade on Certain Countries and Items... Urgent Need for Market Diversification and New Industry Development"

KCCI Presents 'International Comparison and Implications of Korea's Export-Import Concentration'

[Asia Economy Reporter Ki-min Lee] It has been pointed out that in order for South Korea to resolve the US-China trade dispute and supply chain instability, it is urgent to actively respond by diversifying trade markets while fostering new technologies and new industries, and investing in research and development (R&D).

The Korea Employers Federation (KEF) announced on the 12th the report titled "International Comparison and Implications of South Korea's Export-Import Concentration," which investigated the export-import items and concentration of South Korea and the Group of Seven (G7) countries.

According to KEF, South Korea's export-import concentration is generally higher than that of competing G7 countries, indicating that the structure of the Korean economy is more vulnerable to external risks than advanced countries.

The export item concentration was 877.3 points, higher than all G7 countries including Japan (785.6 points) and Germany (536.8 points). The semiconductor and automobile industries account for 23.7% and 10.4% respectively of South Korea's exports.

The import item concentration was also high at 563.4 points, exceeding all G7 countries such as the United Kingdom (478.4 points) and the United States (454.7 points). However, over the past decade, the import item concentration has decreased from 739.4 points in 2010 to 618.2 points in 2015 and 563.4 points in 2020.

In particular, the country concentration of exports and imports for electronic device equipment such as semiconductors and batteries is higher than that of competitors including the United States, Japan, and China. Similarly, the country concentration of exports and imports for road vehicles such as automobiles and automobile parts is also higher than that of Germany, Japan, and China.

South Korea's export country concentration was the second highest after Canada, and the import country concentration was the third highest after Canada and Japan. South Korea's export country concentration was 1076.4 points, lower than Canada (5427.0 points) but higher than other G7 countries such as Japan (1018.0 points).

Likewise, the import country concentration was 910.4 points, lower than Canada and Japan but higher than the United States, France, and others.

South Korea's export concentration countries are China (25.9%) and the United States (14.5%), making it vulnerable to the US-China trade dispute. Imports are also concentrated in China (23.3%) and the United States (12.4%), so if supply chain disruptions occur, stable supply of essential industrial items will be difficult.

Ha Sang-woo, head of KEF's Economic Research Department, said, "It is encouraging that our export market is regaining vitality as global conditions improve recently. However, it is true that our exports and imports heavily depend on specific items, and the export-import markets of key industries are concentrated in a few countries, making us more vulnerable to external shocks than other competitors."

He added, "To mitigate external risks such as the recently highlighted global supply chain instability and the US-China trade war, we must focus more on diversifying trade markets. It is also necessary to foster new technologies and new industries, strengthen the competitiveness of the materials, parts, and equipment industry, ease regulations for diversifying energy sources, and implement active investment and R&D support measures."

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