Korea's largest trade surplus is with Vietnam as trade evolves

President Yoon Suk Yeol, right, announces a statement with Vietnamese President Nguyen Xuan Phuc during the Vietnamese leader's state visit to Korea in December. [NEWS1]

Korea's largest trade surplus in 2022 was with Vietnam, indicating the increasing importance of the country as a major manufacturing base.

It was the first year in which Vietnam ranked No. 1 by this measure in part due to large Korean companies establishing factories in the country.

The Ministry of Trade, Industry and Energy said on Wednesday that Korea's exports to Vietnam totaled $60.98 billion last year, and imports $26.72 billion, resulting in a surplus of $34.25 billion.

“Vietnam has positioned itself as the manufacturing hub for multinational corporations in the Asean bloc,” a ministry official said. “This is the result of major Korean companies making their way to Vietnam, making the country as a close business partner."

Korea's second largest trade surplus was with the United States, at $28.04 billion, and its third largest trade surplus was with Hong Kong, at $25.79 billion.

In 2018, the largest trade surplus was with China and 2019 to 2021 Hong Kong.

China fell to 22nd last year on a sharp decline of exports to Korea, especially of chips and machinery.

The country has been pushing to close its technology gap with Korea, while Covid lockdowns and the trade dispute with the United States were also factors.

The overall trade balance with China was positive, but Korea posted deficits with the country during several months in 2022, the first monthly trade deficits with China in 28 years.

Exports to the United States and Vietnam increased last year, helped by growth in car, automotive parts and semiconductor sales.

LG Energy Solution and SK On announced multi-billion dollar projects last year to build new EV battery plants in the United States on top of their existing factories.

Exports to the U.S. hit an all-time high of $109.8 billion last year as the administration of President Joe Biden pushed to increase EV sales, which translated into an upturn in shipments.

The fourth largest trade surplus was with India, at $9.98 billion, and No. 5 was with Singapore, at $9.86 billion. Samsung Electronics runs smartphone and appliance factories in Vietnam and India.

Korea was the sixth largest exporter, according to the ministry based on customs data between January and September. Full year, the country's trade deficit was $47.2 billion, a record.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]