Share of South Korea’s exports in global trade at standstill for three years

[Photo by Park Dong-min]

South Korea’s exports in global trade have been at a standstill for the last three years and may worsen in 2023 as it faces challenges and fierce competition from China and Taiwan.

According to Maeil Business Newspaper’s analysis of trade data from the World Trade Organization (WTO) from 2011 to 2021, South Korea’s exports accounted for 2.9 percent of the global trade for three years after 2019. Although its share rose to 3.2 percent in 2017, backed by robust semiconductor exports, the portion slowed to below 3 percent. On the other hand, China jumped by 2.3 percentage points during the same period to 15.1 percent, while Taiwan solidified its status, taking 2.0 percent of the market, up from 1.8 percent.

Domestic experts warn that the government must help boost exports in promising sectors, such as biotechnology and batteries, through deregulation.

While rival nations are intensifying their efforts, South Korea’s exports will likely reel under internal uncertainties in consumption and investment. “China and Taiwan have aggressively invested in information and communication technologies, threatening the nation’s status in world trade,” said domestic experts.

Competition in core sectors, such as information and communication technology (ICT), will get fierce next year due to weakening global demand for IT devices. Consequently, the nation’s export share in the ICT sector will likely fall by 1.3 percent, impacting overall prospects for overseas shipments.

According to the Bank of Korea, the nation’s exports is expected to grow 0.7 percent next year after expanding 3.4 percent in 2022. Although the nation’s exports were a core driver for economic growth in the first quarter, growing 3.6 percent on-year, overseas shipments dropped 3.1 percent in the second quarter and rose 1.0 percent in the third quarter. Sluggish exports hit manufacturing production, which fell 1.0 percent in the third quarter, the lowest drop since 8.8 percent in the second quarter of 2020.