Exports to China likely to grow faster from May
HONG KONG (Yonhap) -- South Korea's exports to China are expected to grow faster starting in May, as Chinese manufacturers have stepped up their production, a report said Friday.
"The gradual improvement of the Chinese economy and a recovery in demand among domestic manufacturers will lead to a better environment for South Korean exporters," said Yu Sin-ik, an economist for HMC Investment Securities Co.
He explained that China's manufacturing sentiment for April rose slightly despite global economic uncertainty, indicating the Chinese makers of processed goods will likely continue to increase their restocking.
The Purchasing Managers Index (PMI) of China's manufacturing sector came in at 53.3 last month, up from 53.1 a month earlier, according to the China Federation of Logistics and Purchasing (CFLP). The figure was its highest in more than a year. The sub-indicator for factory output in China rose to 57.2 from 55.2 in March.
China is South Korea's largest trading partner. For the first four months of 2012, however, South Korea saw its exports to China grow a mere 0.9 percent on-year, while its export growth to the U.S. surged 20.7 percent in the same period.
It is seen as unusual since the South Korea's exports to China have generally grown faster than the exports to the U.S., except in 1998.
The slow growth in exports to China is attributed to sagging domestic demand there and China's sluggish re-exports to Europe, with automobile parts and general machinery falling significantly.