Trade reliance on China tops 20%

China now accounts for more than a fifth of Korea`s trade while the United States takes less than a tenth, data showed yesterday.
China`s share of Korea`s exports and imports stood at 20.53 percent last year, up 0.9 percentage point from a year ago, the Korea Customs Services said.
Korea`s trade activity has been shifting with the rise of China and emerging markets in Asia and the decline of such traditional partners as the United State and Japan.
China`s share of Korean trade rose from 2.9 percent in 1991 to 10.8 percent in 2001. By 2003, it surpassed Japan, which was at 14.38 percent, to account for 15.3 percent. The following year, China surmounted the United States, which accounted for 15.84 percent, to become the No. 1 trade partner of Korea with a 16.59 percent share.
The United State`s share, which stood at 24.42 percent in 1991, came down to 9.71 percent last year. Japan`s share went from 21.82 percent to 10.37 percent during the period.
Shipments to China in 2009 amounted to $86.7 billion, accounting for about 23.85 percent of Korea`s total exports. Imports totaled $54.2 billion, about 16.79 percent of the total.
The trade data comes as officials in Seoul study ways to mitigate any shock originating from China, such as the withdrawal of stimulus measures and monetary tightening.
"China is playing an increasingly bigger role in the Korean economy, so we need to pay close attention to any changes there," Finance Minister Yoon Jeung-hyun said last week.
"The China risk" is among the key factors challenging Korea on its way to a full-fledged recovery, experts have said. They worry a slowdown in the Chinese economy could hurt trade and dampen a budding recovery in Korea and elsewhere.
China reported growth at a pace of 10.7 percent in the fourth quarter last year. It grew 8.7 percent for the whole of 2009, higher than the Chinese government`s forecast of 8 percent.
(milaya@heraldm.com)
By Lee Sun-young


2010.02.02