Korea's dependence on China trade deepens: data

South Korea is becoming more reliant on its trade with China, data showed Tuesday, a worrisome development as the world's No. 2 economy is expected to grow at a slower pace in the future.
  

Figures released by the Ministry of Trade, Industry and Energy and Statistics Korea, showed Asia's fourth-largest economy becoming more dependent on its neighbor for its exports.
  

In the nine months of this year, South Korea shipped US$102.1 billion worth of goods to China, accounting for 25.7 percent of all outbound shipments. From January through September, the country's total exports reached $396.9 billion.
  

"This represents a gain from the 25 percent number tallied for the same period last year," the statistical agency said.
  

In 1992, when the two countries normalized diplomatic ties, China accounted for 3.5 percent of South Korea's exports, but this grew to 18.1 percent in 2003. In that year, China replaced the United States as the country's largest overseas market.
  

Exports to China continued to grow afterwards peaking at 26.1 percent in 2013, before dipping to 25.4 percent last year.
  

"China has played a key role in pushing up South Korea's exports over the past several years, but with the country's growth showing signs of slowing down, it can pose new challenges," a ministry official said.
  

He pointed out that with China moving to pump up its domestic economy to fuel growth, South Korea exporters need to make necessary adjustments.
  

South Korea shipped out intermediate goods and parts that were assembled in China for exports. This strategy will have to change to better meet China's consumer market demands in the future.
  

In contrast, exports to South Korea's other Asian neighbor Japan continued to backtrack, due in part to the weak Japanese yen that is making locally made products more expensive in that country.
  

In the three quarters of 2015, exports to Japan reached $54.3 billion, accounting for 4.9 percent of the total, down from 5.7 percent the year before.
  

The statistical agency said this year's number is the lowest reported since related data was first published in 1965.
  

Outbound shipments to Japan reached a high of 38.5 percent in 1973, but has steadily lost ground, dropping to 9.2 percent in 1998, and falling to 5.6 percent last year, before falling again to under the 5 percent market this year.
  

Similarly, the European Union and the United States accounted for 12.5 percent and 11.4 percent of South Korea's exports in the first nine months of this year.
  

Related to the latest data, state-run Korea Development Institute said that if China's gross domestic product dips by 1 percent, it can cause South Korea's economy to fall 0.21 percent. The think tank said that South Korea needs to diversify into other markets so as not to be overly dependent on one country. (Yonhap)