April 19, 2024
Economy
SMEs need to diversify exports to tackle China’s retaliation: experts
[THE INVESTOR] South Korean small and medium enterprises should make efforts to diversify their exports and reduce dependence on China to cushion the impact of Beijing’s possible economic sanctions, industry experts said on March 13.
China has taken a series of retaliatory measures against South Korea over its push to deploy the advanced US missile defense system THAAD on its soil, which Beijing insists could be used to spy on its military.
According to the Korea Customs Service and the Small and Medium Business Administration, South Korean SMEs’ exports to China rose 1.9 percent on-year to US$22.5 billion in 2016.
Nearly 23 percent of their total exports went to China last year, compared with 26.5 percent for South Korea’s big businesses. Roughly 85 percent of local SMEs’ shipments to the neighboring country were capital goods, with consumer goods, such as clothing and cosmetics products, accounting for 13.8 percent.
Given the figures, smaller South Korean firms stand to suffer less damage from China’s retaliation that is focused on tourism and consumer goods than their larger counterparts, but they need to step up efforts to expand their overseas markets to other emerging countries, experts said.
The SMBA said it plans to sponsor overseas exhibitions for SME products and set up technology exchange centers in Iran, Vietnam, Indonesia, Thailand, Peru and Mexico as part of efforts to help them secure beachheads in such strategic markets.
Last year, China was the top destination for local SMEs’ exports, accounting for 22.6 percent of their exports. The US followed with 11.5 percent, Japan with 9.7 percent and the European Union with 5.1 percent.
By Alex Lee and newswires (alexlee@heraldcorp.com)
China has taken a series of retaliatory measures against South Korea over its push to deploy the advanced US missile defense system THAAD on its soil, which Beijing insists could be used to spy on its military.
According to the Korea Customs Service and the Small and Medium Business Administration, South Korean SMEs’ exports to China rose 1.9 percent on-year to US$22.5 billion in 2016.
Nearly 23 percent of their total exports went to China last year, compared with 26.5 percent for South Korea’s big businesses. Roughly 85 percent of local SMEs’ shipments to the neighboring country were capital goods, with consumer goods, such as clothing and cosmetics products, accounting for 13.8 percent.
Given the figures, smaller South Korean firms stand to suffer less damage from China’s retaliation that is focused on tourism and consumer goods than their larger counterparts, but they need to step up efforts to expand their overseas markets to other emerging countries, experts said.
The SMBA said it plans to sponsor overseas exhibitions for SME products and set up technology exchange centers in Iran, Vietnam, Indonesia, Thailand, Peru and Mexico as part of efforts to help them secure beachheads in such strategic markets.
Last year, China was the top destination for local SMEs’ exports, accounting for 22.6 percent of their exports. The US followed with 11.5 percent, Japan with 9.7 percent and the European Union with 5.1 percent.
By Alex Lee and newswires (alexlee@heraldcorp.com)
