Exports could suffer from a slowdown in China: Gov’tConcerns are escalating over Korea’s future export performance amid the ongoing coronavirus crisis, but officials say no serious fallout has been reported yet.
The outbreak and spread of the novel coronavirus, which is believed to have originated in the Chinese city of Wuhan, is widely expected to dampen China’s economic growth in the first quarter.
China is Korea’s leading export market, with slightly over 25 percent of its overseas shipments going to the world’s second-largest economy.
The Ministry of Trade, Industry and Energy said Tuesday that the outbreak has had no serious impact on Korean exports so far, an assessment based on reports from the Korea Trade-Investment Promotion Agency (Kotra) and industry groups.
The ministry voiced concern that a continued spread of the virus could have a negative impact on Korean exports and its management of supply lines, given China’s economic size and its status as a global supply hub.
The Hyundai Research Institute has said Korea’s exports may drop by 177 billion won to 296 billion won ($150 million to $250 million) in the first quarter, should the spread of the new coronavirus lead to a fall in China’s GDP for the January-through-March period.
Yet if history is any indication, Korean exports might not be greatly affected greatly by the new coronavirus.
The severe acute respiratory syndrome (SARS), which broke out in China in November 2002, didn’t make a big dent in Korea’s overall export growth, according to data from the government and the Kotra.
Korea’s exports climbed 19.3 percent on-year for the whole of 2003, and growth rates that March and April were 16.1 percent and 19.2 percent, respectively. The respiratory disease subsided that June.
Ministry officials, meanwhile, vowed to focus their efforts on minimizing the impact of the coronavirus outbreak on Korea’s exports.
Korea remains gripped by sluggish exports due to sagging overseas demand for its products. The country’s exports fell 6.1 percent on-year in January, marking the 14th consecutive month of decline.