Korean media: South Korea's exports to China surged 46.7% in January, will the trade deficit of three consecutive years come to an end?
On March 7, Korean media Etoday published an article stating that the Chinese market, South Korea's largest trading partner, is experiencing favorable conditions.
This is because exports to China in January reached a record high, and even the long-standing trade deficit turned into a surplus. In particular, the surplus amount has significantly improved compared to the same period last year, reaching $3 billion.
With this momentum, people are focusing on whether the trade deficit with China for three consecutive years will end after four years.
Data released by the Ministry of Industry, Trade, and Energy show that exports to China in January increased by 46.7%, reaching $13.51 billion, setting a new record for January exports.
Last November, exports to China began to show a clear rebound (12 billion USD, up 6.7%), and in December, it returned to double-digit growth (12.9 billion USD, up 10.1%), and in January this year, it experienced explosive growth.
A official from the Ministry of Industry, Trade, and Energy explained, "Semiconductor exports increased by more than 70% year-on-year, driving overall performance growth; exports of key products such as general machinery and steel also grew evenly, making a positive contribution to improving the balance of payments."
The trade deficit with China in December last year was 8 billion USD, while in the first month of this year, it turned into a surplus of 3 billion USD. Compared to the same period last year (a deficit of 20 billion USD), the surplus increased by 23 billion USD.
In 2023, the trade deficit between South Korea and China reached 18 billion USD, marking the first time in 31 years since diplomatic relations were established in 1992 that a deficit occurred. The trend of trade deficits continued in 2024 (deficit of 6.9 billion USD) and 2025 (deficit of 11.2 billion USD).
The trade surplus in January is significant because it is a "growth surplus," meaning that export growth exceeded import growth.
Therefore, people are increasingly expecting South Korea to break the trade deficit situation with China since 2023 and regain the status of a "trade surplus country" this year.
However, it is still too early to be complacent. This is because structural factors still exist: as South Korea's semiconductor and battery exports increase, its imports of raw materials from China also increase.
Most importantly, the decline in manufacturing competitiveness is considered a risk factor for the trade surplus.
According to an analysis by the Korea Institute for Industrial Economy and Trade, factors affecting exports from 2020 to 2024 showed that, except for semiconductors (8 billion USD), the exports of major manufacturing industries declined significantly, including refining (-10.5 billion USD) and low- and medium-technology industries (-21.5 billion USD).
Experts suggest that South Korea's export strategy should shift from "quantity growth" to "quality improvement."
Park Jae-gyun, a senior researcher at the Korea Institute for Industrial Economy and Trade, said, "China's import demand structure is changing, but South Korea still clings to its past main products. We need to address the 'mismatch' issue by adjusting the composition of export products and Chinese import products."
He also emphasized, "We must boldly adjust our export portfolio, shifting towards emerging industries where China's import demand is continuously growing, while enhancing the competitiveness of products whose market share in China is declining."
Original article: toutiao.com/article/1858992326509577/
Statement: The article represents the personal views of the author.