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▲ Imports and exports accumulate at the Sinseondae Pier in the Port of Busan. (Yunhap news)
Exports to Korea, which had been struggling for half a year in a swamp of sluggishness due to the new coronavirus infection (Corona 19), succeeded in a positive transition. In particular, there is great hope that the recovery trend will continue in Q4, as flagship items such as semiconductors and automobiles are reviving and exports to major markets such as the United States and China are showing positive signs. However, it is assessed that it is too early to alleviate as the increase in exports in September has a large impact on the number of business days, and there are stressors such as Corona 19 and the conflict between the US and China that have not yet been captured.
According to the ‘September import and export trend’ announced by the Ministry of Commerce, Industry and Energy on the 1st, last month’s exports registered 48.05 million dollars, an increase of 7.7% compared to the same period of the last year.
After returning from a 3.5% increase in February to a 1.6% decline in March, exports to Korea have been slow for 6 months through August, after -25.5% in April, -23, 6% in May, -10.9% in June and -7.0% in July. I couldn’t, but I managed to switch to the plus in September.
This is the first time since Corona 19 that exports have increased. In particular, the export growth rate of 7.7% is the highest in 23 months since October 2018.
▲ Export growth rate and export volume growth trend (data provided = Ministry of Commerce, Industry and Energy)
An Industry Ministry official said: “Even amid Crown 19, the US-China trade dispute and low oil prices, our exports rebounded and rebounded steadily after 7 months.” “It was a transition to a plus in a short period of time,” he emphasized.
In fact, it took 13 months for the information technology bubble in 2001, 12 months for the financial crisis in 2009, and 19 months for low oil prices in 2015 for exports to rebound after the first negative.
Even if you look at every item, the immediate export growth situation is clear.
Semiconductors (11.8%), machinery in general (0.8%) and automobiles (23.2%), which are the first to third largest item in Korea’s exports, showed growth in unison in 23 months .
Semiconductors continued to be positive for the third month in a row, surpassing the $ 9 billion mark for the first time this year. Both the export quantity and the increase / decrease rate are the highest yields since November 2018. General machinery registered an increase in 7 months, recording the highest export value and growth rate since Corona 19. Automobiles, which had a drop of -54.2% in May, turned positive after six months, showing a double-digit increase for the first time this year.
By region, exports to China, the largest market, increased by 8.2%, showing growth in all four markets, including the US (23.2%), the European Union (EU15.4% ) and ASEAN (4.3%) in 23 months.
As a result, there are voices of expectations that exports have entered a recovery phase, but the problem is that in September, the number of business days was large and risk factors such as the prolonged Corona 19 and the conflict between the United States persist and China.
Unlike last year’s Chuseok holiday in September, the number of operational days in September increased by 2.5 days, as it was delayed until October this year. Excluding the effect of working days, average daily exports decreased 4.0%.
The continued global spread of Corona 19 and the conflict between the United States and China are also obstacles to the recovery of exports.
As risk factors such as the continued spread of Corona 19 and the conflict between the US and China, including Huawei sanctions, continue to exist, the government plans to actively respond to maintain export power without slowing the tension.
During this month, it was decided to develop a ‘Digital Export Transformation Plan’, which will transform the entire export process and the export support method into a remote and online method, while promoting a plan to innovate KOTRA in a central export platform.
