As the large trade deficit continues... Government to "Promote Korea-China Economic Cooperation Projects"

Ministry of Industry Holds 'Major Export Companies Meeting' to Explore Support Measures
Lee Chang-yang: "Exports to China Slowdown... Strengthening Trade Cooperation with Key Countries"
Trade Deficit with China Since May... First in 28 Years Since 1994
Comprehensive Export Plan to Be Announced Next Month... Additional 40 Trillion Won in Trade Finance Provided

Minister Lee Chang-yang of the Ministry of Trade, Industry and Energy speaking
(Hwaseong=Yonhap News) Photo by Hong Ki-won = Minister Lee Chang-yang of the Ministry of Trade, Industry and Energy is speaking at the 'Semiconductor Industry-Academia Cooperation 4 Major Infrastructure Establishment Agreement Ceremony' held at Dongjin Semichem in Hwaseong-si, Gyeonggi-do on the afternoon of the 21st. 2022.7.21
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[Asia Economy Sejong=Reporter Lee Jun-hyung] The government plans to promote economic cooperation projects with China next month to mark the 30th anniversary of diplomatic relations between Korea and China on the 24th. This comes from the judgment that measures are needed to boost export vitality as warning signs have been raised in trade with China, Korea's largest trading partner. The government also plans to announce a comprehensive plan next month to support export companies.

On the 22nd at 9 a.m., Lee Chang-yang, Minister of Trade, Industry and Energy, held an "On-site Meeting with Export Companies to China" at the Seoul Digital Industrial Complex and announced this. The meeting was attended by Minister Lee, Yoo Jung-yeol, President of KOTRA, Lee In-ho, President of the Korea Trade Insurance Corporation, and others. Minister Lee said, "Exports in the first half of this year achieved the highest performance on a half-year basis, but exports to China, our largest trading partner, are showing a slowdown," adding, "The government plans to support our companies' exports by promoting economic cooperation projects to mark the 30th anniversary of Korea-China diplomatic relations to recover the export growth trend to China."

In fact, exports to China have been declining since May. According to the Ministry of Trade, Industry and Energy, the trade balance with China recorded a deficit of $1.099 billion in May, marking negative growth. This is the first monthly trade deficit with China in about 28 years since August 1994. The trade balance with China also recorded a deficit of $1.214 billion last month and a deficit of $1.539 billion from the 1st to the 20th of this month.

The problem is that there is little room for improvement in the trade balance in the second half of this year. Minister Lee said, "The high levels of raw material prices, high interest rates, and high exchange rates are likely to increase the burden on our companies," adding, "In particular, global inflation is expected to act as a constraint on export growth."

Accordingly, the Ministry of Trade, Industry and Energy has decided to intensify export expansion policies. First, to fully support exports to China, the ministry plans to diversify Korea-China economic cooperation fields and strengthen practical cooperation. KOTRA trade offices in 20 regions in China and the Korea International Trade Association's China Desk will also actively support the ministry's policies. Minister Lee explained, "We are closely cooperating through high-level communication between the Korea-China industrial and trade departments," and "We will also strengthen trade cooperation with other major countries in response to the contraction of major export markets."

Financial support for export companies will also be significantly expanded. The ministry plans to increase the trade finance scale from the originally planned 261.3 trillion won to 301.3 trillion won, an increase of 40 trillion won. In addition, to resolve difficulties faced by small and medium export companies, the ministry plans to secure additional budgets for logistics cost support in consultation with the Ministry of Economy and Finance and support about 2,500 companies' participation in overseas exhibitions.

A comprehensive plan to fully support export companies will also be announced next month. The comprehensive plan is expected to include direct support for export companies, regulatory improvements, and measures to strengthen the competitiveness of major export industries.

Minister Lee said, "We will strive not only for short-term export expansion but also to create an innovative industrial ecosystem where our industry and trade can grow stably," adding, "It is necessary for the public and private sectors to continuously communicate and strengthen cooperation."

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