Korea-Japan Trade Imbalance Deepening
By Kim Jae-kyoung
Staff Reporter
Concerns over trade imbalance between Korea and Japan are brewing, with the nation's trade deficit with the neighboring country snowballing year after year.
According to the Bank of Korea (BOK), Wednesday, Korea posted a deficit of $23.2 billion in trade with Japan between January and August, the amount nearly equivalent to 80 percent of last year's deficit of $29.9 billion.
The deficit had increased to $29.9 billion last year from $24.4 billion in 2005, $11.4 billion in 2000 and $5.9 billion in 1990. Imports of Japanese industrial parts comprised over 60 percent of the shortfall.
The central bank said that Korea has enjoyed big surplus in its trade with China, Southeast Asian nations and the United States, but they have mostly been used to import goods from Japan.
It stressed that Korea needs to focus more on developing key component technology and fostering smaller firms to reduce the nation's chronic trade deficit with Japan.
``A lack of key technology in the local component industry is the main culprit behind Korea's continued trade deficit with Japan, '' a BOK official said.
``To address this problem, the world's 13th largest economy needs to develop technology and to seek a long-term plan to nurture human resources and sharpen global competitive edge,'' he added.
Another concern is that the surplus in trade with China has been on a downward trend. The trade surplus with China came to $19 billion in 2007, down from $23.3 billion in 2005.
On the other hand, trade surplus with other Asian countries ― Thailand, Indonesia, Malaysia, the Philippines, Hong Kong, Singapore and Taiwan ― increased to $30.3 billion in 2007 from $19.8 billion two year ago, offsetting losses in trade with Japan.