SEOL: Exports to China have risen despite fears that its unofficial boycott of Korean products would hit them hard. China remains the top importer of Korean products, and new data suggests Korea’s economy is robust enough to weather economic retaliation from abroad.
According to the Korea Customs Service on Monday, exports to China declined for three months after Seoul’s decision in July 2016 to let the U.S. deploy a Terminal High-Altitude Area Defense battery here, but have increased for the last 13 months.
Although the growth is lower than the 17.2 percent rise in Korea’s overall exports, Korea still robustly weathered the campaign.
A huge role was played by an explosive growth in shipments of high-tech products including semiconductors and precision machinery as well as intermediate goods like petroleum and petrochemical products.
One industry insider said, “A complete boycott of Korean products would be suicidal since China’s economy is still highly reliant on manufacturing, and halting imports of Korean intermediate goods would have brought China’s factories that churn out finished products to a grinding halt.” This is especially true in the areas of mobile phones and television sets.
But as long as Korea relies on China for a quarter of its trade, the “China risk” will loom indefinitely. Big individual exporters like Hyundai were badly affected, while Lotte closed down its entire chain of Lotte Mart in China.
Prof. Chung In-kyo at Inha University, said, “The lessons we can learn from the THAAD spat is that China is capable of taking economic retaliatory measures against its neighbors based on its interests and that Korea is no exception. China is a very important market, but we must lower our expectations and ensure that we do not become overly dependent on that market.”