Key of recovery lies in investment in future industries
Korea's exports dropped for the fifth consecutive month year-on-year in April. According to the Ministry of Trade, Industry and Energy, the nation's foreign shipments totaled $48.86 billion that month, down 2 percent from a year ago.
The total volume of outbound shipments increased 2.5 percent, but the fall in the unit export price of semiconductors and the aggravation of other trading terms pulled down the value in dollar terms. For Korea's exports to rebound, its shipment volume should rise fast enough to offset drops in unit prices, but it fell short of reaching that level because of the slowing Chinese economy among other reasons.
It is regrettable that exports failed to get out of a contraction. There is a silver lining, though ― the decelerating pace of export declines. Korea's exports in February plunged 11.4 percent from a year earlier, but the year-on-year decline slowed to 8.2 percent in March and 2 percent last month. Exports excluding computer chips even increased 0.8 percent in April, the ministry data showed.
Exports are the sum of a country's global competitiveness. The sluggish export performance means the competitive edge of Korea's manufacturing industry has fallen considerably. The slump of outbound shipments directly affects the performances of major exporting companies. For instance, Samsung Electronics' first-quarter operating profit plummeted to 4.1 trillion won ($3.5 billion), the lowest in two-and-a-half years. The poor performances of major exporters negatively affects the overall economy.
For a small open economy like Korea, exports are a quintessential growth engine. The Moon Jae-in administration should stop wasting time and come up with an emergency package to restore export growth. Policymakers should foster strategic industries with high added value and potential global demand. It must have been in this context that the government has selected non-memory semiconductors, biotech, and next-generation vehicles as targets for intensive promotion.
Improvement in exports can lead to robust investment and consumption as well as exert a positive influence on the economic outlook and enhance business sentiment. All this shows why the Moon administration ought to focus on reinvigorating exports with extraordinary determination.
Korea's exports dropped for the fifth consecutive month year-on-year in April. According to the Ministry of Trade, Industry and Energy, the nation's foreign shipments totaled $48.86 billion that month, down 2 percent from a year ago.
The total volume of outbound shipments increased 2.5 percent, but the fall in the unit export price of semiconductors and the aggravation of other trading terms pulled down the value in dollar terms. For Korea's exports to rebound, its shipment volume should rise fast enough to offset drops in unit prices, but it fell short of reaching that level because of the slowing Chinese economy among other reasons.
It is regrettable that exports failed to get out of a contraction. There is a silver lining, though ― the decelerating pace of export declines. Korea's exports in February plunged 11.4 percent from a year earlier, but the year-on-year decline slowed to 8.2 percent in March and 2 percent last month. Exports excluding computer chips even increased 0.8 percent in April, the ministry data showed.
Exports are the sum of a country's global competitiveness. The sluggish export performance means the competitive edge of Korea's manufacturing industry has fallen considerably. The slump of outbound shipments directly affects the performances of major exporting companies. For instance, Samsung Electronics' first-quarter operating profit plummeted to 4.1 trillion won ($3.5 billion), the lowest in two-and-a-half years. The poor performances of major exporters negatively affects the overall economy.
For a small open economy like Korea, exports are a quintessential growth engine. The Moon Jae-in administration should stop wasting time and come up with an emergency package to restore export growth. Policymakers should foster strategic industries with high added value and potential global demand. It must have been in this context that the government has selected non-memory semiconductors, biotech, and next-generation vehicles as targets for intensive promotion.
Improvement in exports can lead to robust investment and consumption as well as exert a positive influence on the economic outlook and enhance business sentiment. All this shows why the Moon administration ought to focus on reinvigorating exports with extraordinary determination.
![[INTERVIEW] Can art become stable investment source?](https://img.koreatimes.co.kr/upload/thumbnailV2/d9b4b117e5b74f4c931de724ebd2ee68.jpg/dims/resize/178/optimize)
![[INTERVIEW] Choi Min-sik, Lee Dong-hwi on creating Korean-style noir with 'Big Bet'](https://img.koreatimes.co.kr/upload/thumbnailV2/8b795a8f6b42492db4e8fdc47e9abd8d.jpg/dims/resize/178/optimize)
