August exports reach record, pass $50 billion

Korea exported more than $50 billion of goods in August despite fears of a global trade war, but experts continue to worry about the overreliance on a handful of popular products.

According to data from the Ministry of Trade, Industry and Energy released over the weekend, Korea Inc. shipped out $51.2 billion worth of goods in August this year, up 8.7 percent compared to the same period last year.

“Factors that contributed to the increase in exports include the improved condition of the global manufacturing sector, expansion of the gross domestic products of major economies and the increases in gas price and the prices of Korea’s main export items,” said an official from the Trade Ministry.

August is the fourth straight month this year that monthly shipments from Korea have exceeded the $50-billion threshold.

It is also the first time ever that August exports in any year have passed the $50-billion mark, another milestone for the Korean economy.

“We expect the average monthly increase in exports in the second half will be maintained at around 5 percent,” said Paik Un-gyu, the minister for trade, industry and energy. “Accordingly, the total amount of exports from this year will surpass $600 billion for the first time in history.”

From January to August, outbound shipments from Korea totaled at $399.8 billion, up 6.6 percent from the same period last year and a record high for the period.

Despite the strong numbers, concerns loom large that the economy is unable to break free from depending too heavily on one or two export items, including computer chips.

Data shows that semiconductor exports in August catapulted by 31.5 percent from a year ago to $11.5 billion, beating the historic high it set just two months ago in June at $11.2 billion.

As a result, computer chip shipments are taking a bigger share of the pie each month. In January, semiconductors took up 19.7 percent of total exports. In August that figure had jumped up to 22.5 percent.

If semiconductor exports are taken out of the picture, Korea’s outbound shipments from January to August have only risen by 0.37 percent. More disconcerting is the slowdown in investment by semiconductor companies. Data from Statistics Korea shows that facilities investment has dipped for five straight months since March this year.

An official from the statistics agency explained that the investment made by major chip companies began slowing as new facilities entered the final phase of construction.

“The Korean economy is in an unstable situation where, if semiconductor exports take a hit, it could be in crisis,” said Sung Tae-yoon, a professor of economics at Yonsei University. “The economy needs a strategy where it reduces its reliance on semiconductors while also increasing the competitiveness of the industry itself.”

BY CHOI HYUNG-JO [choi.hyungjo@joongang.co.kr]