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By Kim Hyun-bin
Korea's export reliance on China dropped below 20 percent in the first quarter of this year as the country continues to diversify exports to other markets to reduce its heavy dependency on the world's second-largest economy, according to a report released by the Korea International Trade Association (KITA), Monday.
KITA said Korea's dependence on exports to China decreased consistently from 26.8 percent in 2018 to 22.8 percent in 2022 and dropped further to 19.5 percent in the first quarter of this year. That means 19.5 percent of Korea's total outbound shipments went to China during the first three months of 2022.
"The recent decline in the trade balance is driven primarily by a decrease in exports rather than an increase in imports, with the significant drop in exports to China having a substantial impact," said Jo Ui-yoon, a researcher at KITA. "In preparation for the possibility of a prolonged slump in Chinese exports, the importance of exploring export markets beyond China has increased."
KITA analyzed that export growth to markets outside of China has outpaced the growth rate of exports to China, signifying the ongoing diversification of Korean export destinations.
While exports to China fell by 4.4 percent last year, exports to markets excluding China increased by 9.6 percent. In the first quarter of this year, exports to China decreased by 29.8 percent, while exports to markets excluding China declined only by 6.8 percent.
As the proportion of exports to China continues to decrease, key industries including petroleum products, petrochemicals, steel, automotive parts, displays and secondary batteries expanded their export markets outside of China.
Korea's exports to the U.S. have increased, with Korean goods holding the highest market share since 1990, reaching 3.59 percent in the first quarter of this year.
India showed positive trends in five categories of Korean exports: petrochemicals, steel, displays, secondary batteries and plastic products. Vietnam experienced a positive trend as an export destination for Korea's automotive parts and display products. Australia witnessed export growth centered on petroleum products.
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