The Korea Trade Association released data on January 6th showing that South Korea’s exports to China and the United States last year had a difference of $5.2 billion, marking a 21-year low since 2003. This was mainly attributed to a decrease in South Korea’s exports to China and an increase in exports to the United States following the start of the US-China trade war.
Last year, South Korea’s exports to China increased by 6.6% compared to the previous year, reaching $133.026 billion, solidifying China as South Korea’s largest export destination. During the same period, South Korea’s exports to the United States grew by 10.45% to $122.791 billion, making the US South Korea’s second-largest export market. This narrowed the gap between the two to $5.235 billion, the lowest level since 2003.
According to reports from Yonhap News Agency, South Korea’s exports to China exceeded those to the US for the first time in 2003, with a gap of $0.891 billion. However, this gap widened over the years, reaching a record high of $89.405 billion in 2018.
In 2018, South Korea’s exports to China reached $162.125 billion, coinciding with the start of the US-China trade war, which has continued to this day.
Subsequently, the gap between South Korea’s exports to China and the United States began to narrow, decreasing to $9.122 billion in 2023 and further down to $5.235 billion last year.
This trend can be mainly attributed to the decrease in South Korea’s exports to China and the increase in exports to the United States.
South Korea achieved a record high export value to China of $162.9 billion in 2021. However, due to factors like a slowdown in Chinese domestic demand, South Korea’s exports to China decreased to $155.7 billion in 2022, further dropping to $133 billion in 2024.
Conversely, South Korea’s exports to the US continued to grow, with impressive performances in sectors such as automobiles (8.2%), semiconductors (122.8%), general machinery (3.6%), and computers (196.8%). Major South Korean corporations like Samsung, SK, Hyundai Motor, and LG increased investments in cutting-edge equipment such as semiconductors, secondary batteries, and electric vehicles for the US market, leading to an increase in the export of related machinery and intermediate products.
According to reports from The Korea JoongAng Daily, the Ministry of Trade, Industry, and Energy of South Korea and the Korea Trade Association stated on January 5th, that in the chip exports for January to November 2024 ($127.4 billion), the proportion of South Korea’s exports to the United States and its “chip alliance” Taiwan actually increased from 13.9% to 21.7%, representing a rise of about 8 percentage points.
During the same period, mainland China accounted for 33.3%, Hong Kong for 18.4%, totaling 51.7%. It is believed that 80%-90% of chip exports to Hong Kong eventually enter mainland China. This was a decrease of over 9 percentage points compared to 2020 (61.1%).
Some experts predict that if trade tensions between the US and China escalate during a potential second term of Trump and with the acceleration of supply chain restructuring centered around the US, expanding South Korea’s exports to China could become increasingly challenging.