China-South Korea Export & Import Down in Jan-July 2016

According to China Customs statistics, in January-July 2016, the export-import value between China and South Korea totaled CNY 908.72 billion, down 3.8% year-on-year (YOY), accounting for 6.9% of China’s gross export-import value, keeping South Korea the 6th biggest trade partner with China. Therein, China’s export reached CNY 340.55 billion, down 2.3% YOY; China’s import reached CNY 568.17 billion, down 4.7% YOY; its trade deficit was CNY 227.62 billion, narrowing by 8.1% YOY.

Ⅰ. The Export & Import Characteristics in Jan-July:

(1) Monthly export-import value showed slight drop from the peak at the end of 2015 and kept steady since this March. At the end of 2015, the monthly export-import value climbed to more than CNY 160 billion, the highest in history. Since 2016, the monthly value has certain decline: February value hit the lowest since March 2011. With the trade with South Korea getting steady since this March, the export-import value reached CNY 135.68 billion this July, down 0.7% YOY and down 1.8% MOM; therein export value CNY 51.55 billion, up 7.3% YOY and up 0.7% MOM; import value CNY 84.13 billion, down 5.1% YOY and down 3.3% MOM. (See the chart below).

(2) The export and import showed a big drop YOY by processing trade, while having small increases YOY by ordinary trade and by Customs special control.

(3) Foreign-invested enterprises dominated the trade with South Korea, and Chinese private enterprises increased their export and import.

(4) Electro-mechanical products were the majority of the export and import goods. (See the table below.)
 

 

Ⅱ. Causes of the Decline in China-South Korea Trade Value:

(1) South Korean advantageous industries are challenged and transnational Korean companies encountered business shrink, encumbering China-South Korea trade growth.

(2) South Korea is sluggish in economic recovery, weak in domestic demand, damping Chinese exports thereto.

(3) China’s industrial capacity is enhanced so as to substitute homemade products for South Korea-made ones, constraining the import from there.

Ⅲ. Notable Problems and Relevant Suggestions

(1) China-South Korea Free Trade Agreement is promoting the bilateral trade to all fields of life in the two countries.

(2) The deployment of “THAAD” system in South Korea would affect China-South Korea trade development.