'Tech-Advanced' Korea, Technology Trade Surplus Is Not Far Away Either

Ministry of Science and ICT to Announce Last Year's Technology Trade Statistics on the 25th
Technology Trade Balance Ratio (Export to Import Ratio) Achieves 0.80 Level for the First Time Ever
Despite a Deficit of Around 3.7 Billion USD, Trade Balance Continues to Improve Steadily

The 'Korea Intellectual Property Exhibition' event held on December 1, 2021. Not directly related to the article. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Kim Bong-su] South Korea recorded a slight decrease in its technology trade deficit last year, amounting to 3.772 billion USD compared to the previous year. However, with exports steadily increasing, the export-to-import ratio rose to 0.8 for the first time since statistics began, indicating progress toward a 'surplus.'

The Ministry of Science and ICT announced the '2021 Technology Trade Statistics' results on the 25th. According to the report, South Korea's technology exports last year totaled 1.40921 billion USD, a 16.8% increase from the previous year, while technology imports rose by 9.3% to 18.692 billion USD. This resulted in a deficit of 3.772 billion USD, a significant 12.6% decrease compared to the previous year. This deficit is the lowest in 13 years since 2008, when it was 3.14 billion USD. Since the statistics began in 1997, South Korea has consistently recorded a technology trade deficit. The deficit remained in the 2 billion USD range until 2007, but surged with the rapid increase in ICT technology imports starting in 2008, reaching a record high of 6.889 billion USD in 2010. From then until 2015, the deficit stayed between 5 and 6 billion USD, then gradually decreased to the 4 billion USD range from 2016 onward. It was 3.862 billion USD in 2018, 4.121 billion USD in 2019, and 4.318 billion USD in 2020.

The actual technology trade balance ratio was 0.80, up 0.05 percentage points from the previous year, marking a record high. This ratio was around 0.07 in the late 1990s, rose to between 0.20 and 0.40 in the 2000s, and further increased to between 0.30 and 0.70 in the 2010s. After reaching 0.75 in 2020, it climbed to 0.80 last year. This indicates an improvement in the technology trade balance as South Korea's intellectual property exports increase.

The total technology trade volume last year was 33.613 billion USD, an increase of 3.735 billion USD (12.5%) compared to the previous year.

By industry, the electrical and electronics sector recorded the largest technology trade volume at 12.126 billion USD, surpassing the previous year's top sector, information and communications, which stood at 11.541 billion USD. The technology trade balances of the information and communications, chemical, and machinery industries shifted from deficits to surpluses compared to the previous year.

By institution type, while both large enterprises and mid-sized companies saw increases in technology exports and imports, small and medium-sized enterprises (SMEs) experienced decreases in both. The increase in technology exports by large enterprises (up 47.2%) and mid-sized companies (up 37.2%) outpaced the growth in technology imports (large enterprises up 33.5%, mid-sized companies up 9.1%), leading to an improvement in the technology trade deficit. Conversely, SMEs saw technology exports and imports decline by 46.3% and 29.5%, respectively, causing their technology trade deficit to widen to 1.32 billion USD.

By country, the United States was South Korea's largest partner for both technology exports and imports, and also accounted for the largest technology trade deficit among all countries. Technology exports and imports to the U.S. increased by 25.2% and 19.0%, respectively, making it the largest technology trade partner. The deficit also grew by 14.3%, from 3.32 billion USD the previous year to 3.8 billion USD last year, marking the largest deficit by country. China, which was South Korea's top technology export destination last year, saw only a 5.2% increase this year, losing the top spot to the U.S. Meanwhile, technology imports from China rose significantly (from 640 million USD to 930 million USD, up 46.3%), causing the technology trade surplus with China to slightly decrease (from 2.37 billion USD to 2.23 billion USD, down 5.8%).

The Ministry of Science and ICT stated, "Last year, South Korea's technology trade showed both quantitative and qualitative growth, with a significant increase in trade volume and an improved trade balance. This trend aligns with other trade statistics, as domestic merchandise trade volume increased by 28.5% compared to the previous year, and the intellectual property trade balance also improved, with exports of industrial property rights excluding copyrights rising by 39.4% and imports by 6.1%."

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