Public Trade 'Emergency'... Government to Announce Export Measures Next Month (Comprehensive)

Trade Deficit in Goods Since May... First Time in 28 Years Since 1994
Lee Chang-yang: "Slowing Exports to China... Strengthening Trade Cooperation with Major Countries"
Ministry of Industry Launches Export Policies... Promotes Korea-China Economic Cooperation Projects
Export Measures 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 (right) is speaking at the "Major Export Companies On-site Meeting" held on the morning of the 22nd at the Seoul Digital Industrial Complex.
Photo by Ministry of Trade, Industry and Energy

[Asia Economy Sejong=Reporter Lee Jun-hyung] Amid the recent slowdown in exports to China, South Korea's largest trading partner, Lee Chang-yang, Minister of Trade, Industry and Energy, announced that a comprehensive plan to support export companies will be unveiled next month. The plan will include diversification of Korea-China economic cooperation and expanded financial support for export companies.

On the morning of the 22nd, at the ‘On-site Meeting with Export Companies to China’ held at the Seoul Digital Industrial Complex, Minister Lee stated, "The government plans to support our companies' exports by promoting economic cooperation projects to mark the 30th anniversary of Korea-China diplomatic relations in order to restore the growth trend of exports to China." The comprehensive plan is expected to include direct support for export companies, regulatory improvements, and measures to strengthen the competitiveness of export industries.

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 monthly trade deficit with China is the first in about 28 years since August 1994. The trade deficit with China was $1.214 billion last month and $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 forecasted, "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 limiting factor on export growth."

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

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

Meanwhile, the Ministry of Economy and Finance held the 3rd Emergency Economic Vice Ministers’ Meeting on the same day to review export trends to China and risk factors. Bang Ki-sun, 1st Vice Minister of Economy and Finance, stated, "China’s GDP growth in the second quarter was only 0.4% year-on-year due to the impact of major simultaneous lockdowns," and added, "Exports to China, which had maintained double-digit growth, have recently shown signs of contraction." Vice Minister Bang said, "Based on the review, we will devise various countermeasures such as trade finance support and resolving logistics difficulties," and added, "We will strive to build a sustainable and mutually beneficial cooperation foundation in line with changes in the trade structure due to China’s industrial upgrading."

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