Korea's exports to China ballooned 162 times since normalization of ties but droop this year

[Graphics by Song Ji-yoon]

South Korea's exports to China over the last 30 years ballooned more than 162 times while its overall exports expanded 9 times, but the country has begun to log a trade deficit with China from this year to raise concerns for the trade powerhouse.

Korea’s export to China recorded $162.9 billion in 2021, up a whopping 162.4 times versus $1.0 billion in 1991, a year before the two countries established diplomatic relations, according to the Korea International Trade Association on Tuesday.

Over the same 30-year period, Korea’s total exports expanded 9-fold to $644.4 billion, with its export to the United States growing 5.2 times to $95.9 billion and to Japan 2.4 times to $30.06 billion.

In 1991, the U.S was the largest export market for Korea, followed by Japan, Hong Kong, Germany, and Singapore. China ranked 15th.

But China ascended rapidly after the normalization of diplomatic ties and became the sixth largest export market for Korea in 1992, fourth in 1993, third in 1996, second in 2001, then the top in 2003. Since then, China accounted for the largest share of Korea’s exports and has delivered a trade surplus to Korea since 1993.

The boon from China, however, has come to a stop.

Korea so far has achieved a trade surplus of $3.57 billion with China for the January to July period this year but the balance has been in the deficit since May. Korea is expected to extend the deficit streak to the fourth month in August as its trade deficit with China already amounted to $667 million in the first 20 days of the month, according to data from the Korea Customs Service.

The loss is largely due to the economic slowdown in China, which has been imposing another series of major Covid-19 lockdowns across Shanghai, Beijing, and other major cities since April this year.

The last time that Korea registered a trade deficit with China for four months in a row was 30 years ago, from July to October 1992. The country also has not yet recorded any annual trade deficit since 1992.

For China, South Korea is its fourth largest trade partner in terms of exports, as of 2021.

China’s export to Korea amounted to $150.5 billion in 2021, accounting for the fourth largest share, 4.5 percent, of its total figure, according to a study published by the Korea International Trade Association.

China’s largest export market was the U.S with $576.4 billion. The second largest was Hong Kong with an annual export of $351.6 billion, followed by Japan with $165.7 billion. Vietnam was its fifth largest export market with $137.9 billion.

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