South Korea is on the verge of achieving an annual export volume of 700 billion dollars for the first time in its history, and is even eyeing a "golden cross" by surpassing Japan, a traditional export powerhouse. As of October this year, the export gap between the two countries has narrowed to just over 20 billion dollars compared to the same period last year, leading analysts to say that South Korea is not only catching up but is now within striking distance of overtaking Japan.

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According to the Korea International Trade Association, the Japan Customs Association, and the International Monetary Fund (IMF), which compiles export figures by country worldwide, South Korea's exports from January to October this year (converted to US dollars) reached 579.1 billion dollars. Japan recorded 606.1 billion dollars during the same period, resulting in a gap of about 27 billion dollars between the two countries. Considering that during the same period last year, South Korea posted 566.2 billion dollars and Japan 688.6 billion dollars, with a gap of 122.4 billion dollars, the difference has narrowed significantly this year.

In the global export rankings, South Korea is currently in sixth place, closely trailing Japan, which is in fifth. Since Japan announces its export figures in yen, exchange rate fluctuations must be considered, making direct comparisons difficult. However, the trend of the gap narrowing significantly compared to last year is clear.

While Japan has not yet announced its export figures for November, South Korea's Ministry of Trade, Industry and Energy released its data first on December 1. South Korea's exports for November amounted to 61.04 billion dollars, setting a new record for the highest November export figure ever. If Japan's November exports are assumed to be similar to last year's 58.8 billion dollars, it is expected that South Korea has closed the gap with Japan even further.

Export vehicles and containers are waiting to be loaded at Pyeongtaek Port, Gyeonggi Province. Photo by Jinhyung Kang

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South Korea has steadily narrowed the export gap with Japan every year. After the gap between the two countries stood at 128.8 billion dollars in 2020, South Korea's exports have trended upward while Japan's have declined, bringing the two closer on the graph. In 2023, the gap narrowed to 85.1 billion dollars, marking the first time it fell to a three-digit figure. In the first half of last year, South Korea even closed the gap to 3.2 billion dollars, raising expectations of overtaking Japan within the year. However, due to variables such as the unstable global market and the emergency political situation following the declaration of 12·3 Martial Law, South Korea lost momentum in the second half and was unable to surpass Japan. As a result, South Korea's final export volume in 2024 was 683.9 billion dollars, while Japan's was 707.5 billion dollars, maintaining a significant gap.

This year, however, analysts expect the trend to differ from last year due to the impact of the semiconductor supercycle. With expectations of surpassing Japan running high, the South Korean export industry is moving even more actively for a "last-minute spurt" at the end of the year. The gap has narrowed significantly compared to the same period last year, fueling optimism.

Expectations are rising further as South Korea's "star export items" are performing well in the export market this year. In particular, semiconductors and automobiles are playing a leading role in driving export growth. Semiconductors alone recorded 17.26 billion dollars in November, a 38.6% increase year-on-year. This broke the previous all-time monthly export record of 16.61 billion dollars set in September, just two months earlier. Automobiles also saw a strong performance, with November exports rising 13.7% to 6.41 billion dollars, thanks to robust sales of internal combustion engine and hybrid vehicles. Only 4.83 billion dollars remain to reach the annual record of 70.86 billion dollars. Do Wonbin, Senior Researcher at the Korea International Trade Association, said, "Semiconductors do not have strong seasonality, but since existing orders need to be fulfilled within the year, there tends to be an increase in exports at the end of the year," adding, "For this reason, there is still room for the total export volume to increase further in the remaining period."