Korea relies more on imports for intermediate goods than G-7 nations: report

Korea Enterprises Federation (KEF) / Courtesy of Korea Enterprises Federation

Korea depends more on imports for its intermediate goods needs than other major economies, with a heavy reliance on China, a report showed Monday.

Imports of intermediate goods accounted for 50.2 percent of the country's total imports in 2020, according to the report from the Korea Enterprises Federation (KEF). Final goods came next with 30.8 percent, followed by primary commodities at 18.4 percent.

The ratio was much higher than that for the Group of Seven (G-7) industrialized nations. Comparable figures were 46.9 percent for Britain, 46.2 percent for Italy, 44.1 percent for Germany, 43.3 percent for France, 43 percent for Canada, 40.8 percent for Japan and 38.3 percent for the United States.

Korea's dependency on Chinese imports surged from 19.4 percent in 2010 to 28.3 percent in 2020, with its dependency on Japan slumping to 12.8 percent from 21 percent over the same period.

Dependency on China for intermediate goods imports was higher than that for the G-7 countries as their dependence rose an average 0.8 percentage points.

The business lobby voiced concern that Seoul's high dependency on Beijing could make it vulnerable to a "China risk," such as a U.S.-China trade row and China's COVID-19 lockdowns.

The KEF also said Korea's dependency on imports for industrial raw materials, including rare earth metals, steel and lithium, came to 30.2 percent in 2020, the third highest among major economies after Britain's 33.3 percent and Italy's 31.7 percent. Seoul's reliance on China for those materials was 33.4 percent, higher than that for the G-7. (Yonhap)