Korea tops 10% of China’s import marketMadeinkoreablog
The share of Korean products in China’s import market exceeded 10 percent for the first time, thanks to the growing demand for Korean semiconductors, the Korea International Trade Association said Monday.
China is Korea’s largest trade partner, accounting for a quarter of its entire exports at $82.8 billion in the first half of 2015. China’s import market was sized at $775.8 billion between January and June, about a 19.1 percent fall from the same period last year.
According to a KITA report, Korea’s exports to China took 10.7 percent of the China’s import market in the first half. Korea holds the largest share, followed by the U.S. at 9.2 percent, Japan 9 percent, Taiwan 8.9 percent and Germany 5.6 percent.
“The good news is that Korea has managed to widen the gap with its competitors ever since topping the market in 2013,” said Choi Yong-min, head of KITA’s Beijing office.
Choi said this owes to the strong demand for semiconductor memory chips, which saw a 16.7 percent rise in demand compared to last year, as well as processor and controller and LCD panel businesses.
The export of semiconductor memory chips was worth $12.3 billion in the first half, alongside the processor and controller sector seeing $8.4 billion and LCD panels seeing $8.2 billion. These made up for the double digit-plummet in wireless telephone parts and other integrated circuits sales inflicted by the economic slowdown leading to the decline in Chinese imports.
But with more people forecasting that the Chinese market instability would hit Korea — the largest beneficiary of China’s once-flourishing economic drive — hard, calls for a change in paradigm are emerging.
They claim that the current parts and component-focused exports should diversify into retail and consumer goods, which have a better future in the volatile Chinese consumer market affected by tariff reductions, the possible adoption of a Two-Child Policy, the rapid growth of e-commerce as well as aging society.
KITA also acknowledges cosmetics, baby, medical and environmentally friendly goods as well as food and beverages as the emerging categories to benefit from the Chinese authorities’ domestic demand-boosting policies.
Korean milk, powdered milk, diapers, snacks, instant noodles, bottled water, beer, cosmetics and skin care goods, air purifiers, water purifiers, sonographers, antibiotics and dental devices were selected as the next-generation “it” items. Large corporates such as AmorePacific, LG, Maeil Dairies and other consumer goods companies have already seen substantial success there, and are expected to be joined by more businesses in the future.
“Korea is geographically and cultural close to China and its products have good quality at an affordable price compared to others,” Lee said.
“If we could restructure the export sector, from intermediate trade-oriented items to consumer goods swiftly, we wouldn’t have to worry too much about the future,” he added.