ED $1 tril. in annual exports

Korea, Asia's export powerhouse, is poised to exceed $1 trillion in annual exports this year. The Ministry of Trade, Industry and Resources on Sunday announced that exports in October reached $115.3 billion, a 93.7 percent increase year-on-year. That puts the country's total exports in the first 10 months of the year at $930 billion. This means Korea is on track to reach $1 trillion in yearly exports as early as this month, which would make it the fourth country to do so after the United States, China and Germany.

"It feels only like yesterday that we celebrated exporting $10 billion," President Lee Jae Myung posted on social media. "I thank the businesspeople and the workers on the production floor who have put in their utmost efforts."

With that remark, the president spoke for many of those who lived through the heyday of industrialization, which now stands at the forefront of Korea's export-led economy.

The export figures even drove up Korea's gross domestic product growth for the third quarter to 1 percent, an increase from the 0.6 percent in the second quarter and exceeding the Bank of Korea's (BOK) forecast of 0.3 percent.

The excitement over the $1 trillion export figure, however, is momentary, as the businesses working at the forefront and policymakers tracking the country's economic performance realize the pressure that stems from Seoul's export structure, in which the nation's chip products — from high-bandwidth memory to DRAM — account for about 50 percent of the export surge.

Korea's other leading exports, such as automobiles, petrochemicals and K-cosmetics, also posted increases in October. But economic policy and experience should compel Korea to tackle its chip dominance to diversify its leading export items to include materials and equipment, and to facilitate small and medium-sized companies exporting their products. Bold deregulation efforts, such as flexibility in weekly work-hour limits, should also be pursued in support of the Lee administration's three megaprojects for the advancement of the chip sector.

To consumers, the $1 trillion figure may not bring much consolation, as daily livelihood and affordability issues grow in their households. Korea's private consumption fell 0.2 percent in the third quarter from the previous quarter, according to BOK data. This marked a downward trajectory since the beginning of the year, where it slowed from 0.6 percent in the first quarter and then to 0.4 percent in the second quarter.

Korea's chip rally is fueled by the unprecedented investment boom in artificial intelligence (AI), but concerns that the boom is nearing its peak have been more persistent. Last week's decline of top AI and semiconductor firms on Wall Street prompted a resurgence of such concerns. Alphabet, Google's parent company, saw its shares slide 12.6 percent on Thursday when it did not meet third-quarter earnings expectations. U.S. chip giant Intel's stock prices also dropped nearly 29 percent on Friday, while another chipmaker, SanDisk, saw a 13 percent decline.

Stock market volatility should not be the major gauge for the economy. However, for export-oriented Korea, the volatility on the bourses combined with continuing tensions in the Middle East loom as major challenges. On top of that, the persistent concerns over the AI and semiconductor peak should invariably be weighed. As optimistic export projections mix with not-so-encouraging numbers, now is the time for policymakers to work on putting forth a sustainable and innovative economic model. There is ample ability, capacity and information to do so, as those who lived through the heyday of growth did with much less.