With the trade dispute between the US and China casting a shadow over the global economic outlook, South Korea’s exports fell for the sixth straight month in May.
According to data released by the Ministry of Trade, Industry and Energy on June 1, South Korea exported some $45.9 billion worth of products in May, about 9.4 percent down from a month earlier.
The government attributed the poor performance to growing “external uncertainties” over the escalating US-China trade war and its consequences. These have worsened the country’s efforts to recover since February, the Trade Ministry said.
Sung Yun-mo, minister of trade, industry and energy.
“While the pace of export decline has slowed since February, the deepening US-China trade dispute and Brexit have a negative impact on the path of recovery,” said Trade Minister Sung Yun-mo, according to the ministry.
After the export volume in February declined about 11 percent from a month earlier, the decrease rate had slowed to 8.3 percent in March and 2 percent in April. But the trend reversed in May, when the country’s export volume shrank 9.4 percent from the month before.
The government said the negative impact of the US-China trade dispute on the Korean economy has been augmented by prospects of a Chinese economic downtown and the sluggish semiconductor industry.
According to the Trade Ministry, Korea’s sales of memory chips in May dropped about 30 percent from a year earlier, with last month’s shipments reaching $7.53 billion. Meanwhile, the country’s exports to China fell 20.1 percent -- the worst performance in more than three years.
“Despite the challenging conditions for exports, we expect things will improve later this year,” said Sung. “There are opportunities, such as chip price recovery, China’s stimulus packages and our solutions for boosting exports.”
While the export decline was mainly led by a downturn in the semiconductor industry, other key industries were also affected by weakened demand from China, Korea’s biggest trading partner.
Shipments of petrochemical products reached $3.66 billion in May, down 16.2 percent from a year before. The display and steel industries also saw exports decline in May, with the former shrinking 13.4 percent and the latter declining 7.6 percent.
By contrast, the auto and shipping industries saw exports improve in May from a year before. Shipments of cars rose to $39.5 billion, a 13.6 percent increase from a year before. Exports of ships reached $11.9 billion, up 44.5 percent from the previous year.
“In order to improve our export competiveness, the government will diversify items, markets and exporters and establish trade infrastructure. … Those measures will be rolled out consecutively by the end of this year,” said Sung.
By Yeo Jun-suk / The Korea Herald (firstname.lastname@example.org)