Korea slides to become China’s fifth largest importer

Containers for exports and imports are stacked at a pier in Busan on July 4. [YONHAP]

Korea is now China’s fifth largest importer, down from second last year, mainly due to the sharp decline in chip and automobile exports.

Korea’s exports to China amounted to $77 billion in the first half, down 25 percent on year, according to the Chinese General Administration of Customs. It only accounted for 6.1 percent of China’s total imports, down 1.5 percentage points compared to last year.

Taiwan was ranked No. 1 in terms of exports to China in the first half with 7.3 percent, followed by the United States with 7 percent, Australia with 6.4 percent, and Japan with 6.2 percent. Korea is now China’s fifth largest importer, a sharp drop from the second place it held during the same period last year.

In the late 2010s a wide range of Korean products were neglected in China when the two countries clashed over the deployment of the Terminal High Altitude Area Defense system, or Thaad.

In 2016, Korean products accounted for 10 percent of China's total imports. That decreased to 9.6 percent in 2017, 8.4 percent in 2019 and 2020, 7.9 percent in 2021, and 7.4 percent last year.

Major Korean companies like chipmaker Samsung Electronics and automaker Hyundai Motor have seen a serious drop in their sales in the Chinese market.

Chinese sales of 113 major Korean companies in the past six years dropped 37.3 percent last year compared to 2016, according to CEOscore, a company evaluation website. The tracker analyzed 113 firms of the 500 Korean biggest companies that have announced the sales figures of their Chinese subsidiaries.

Sales of Beijing Hyundai Motor and Kia plunged 76 percent to 4.9 trillion won ($3.8 billion) last year compared to 20.1 trillion won in 2016.

Korea logged an accumulated trade deficit of $12.9 billion with China this year through to May 25, around half of the country's total trade deficit. Korea's trade deficit with China has continued for nine consecutive months since October.

The weaker-than-expected impact of China's reopening of its economy in Korea was also an influence.

In June, China's exports experienced a significant downturn of 12.4 percent year on year, surpassing the market prediction of a 9.5 percent fall.

It was the biggest drop since Feb. 2020, when Covid-19 swept the world.

BY SARAH CHEA [chea.sarah@joongang.co.kr]