Chinese imports causing thousands of regional Korean jobs to disappear

Economy

Published: 09 Jan. 2024, 06:30

Chinese imports causing thousands of regional Korean jobs to disappear

Trade containers stacked at Busan Port on Jan. 1

The increase in imports of manufactured goods from China is negatively affecting regional employment in Korea, according to a report on Thursday.

The analysis comes as Korea’s imports continue to be concentrated from China while exports bound to China drop and shift toward the United States.

A one percentage point increase in a region’s exposure to imports from China leads to a 4.66 percentage point decrease in regional employment, according to the Korea Employment Information Service (KEIS) on Thursday.

The employment trend research agency analyzed national business survey statistics and United Nations trade data from 2000 to 2015. Based on this data, the KEIS calculates that a total of 229,900 jobs ceased to exist in 50 metropolitan cities over 16 years between 2000 to 2015.

The extent of the decrease was larger in areas where manufacturing jobs were concentrated. The areas where the most jobs disappeared were Incheon and its neighboring areas; Ansan and Siheung; Gumi; Cheonan and Asan; and Suwon, Hwasung and Osan, in that order, with 39,000, 26,000, 25,300, 24,700 and 19,200 jobs lost in those areas respectively. Most of them are places with a concentration of manufacturing and industrial complexes, including factories.

Increased imports from China have led to local job losses, according to the Korea Employment Information Service. [LEE JEONG-MIN]

On the other hand, the number of jobs increased by 33,100 in Seoul, where the service industry is relatively large. The increase in imports from China is therefore seen to have accelerated the shift of jobs to Seoul.

This is because Korea’s imports from China are mainly from the manufacturing sector, according to analysts.

“As China’s manufacturing sector’s productivity goes up and becomes price competitive, domestic [Korean] consumers will regard China-made goods as an attractive alternative to domestic goods and purchase them,” said Koo Ja-hyeon, an adjunct analyst at KEIS who conducted the research.

“This will negatively affect employment in areas centered around the manufacturing sector,” Koo added.

Around 70 percent of the jobs that decreased due to the increase in imports from China, or 161,800 jobs, were reported to be meant for regular employees — those with employment contracts with periods longer than a year.

“The increase in imports from China has led to a negative effect on regular employee jobs, which have high job security,” Koo said. “If jobs created by the increase in imports from China are those low in job security, such as temporary posts or one-day jobs, this would mean the increase in trade with China would have made the quality of jobs in the labor market worse.”

Koo suggested that unemployed people should be given support such as vocational training to make the transition from industries affected by Chinese imports to industries that center around creating China-bound exports.

Koo believes re-employment programs should be centered around technology-intensive industries such as those that use liquid-crystal display (LCD) or integrated circuits, which are expected to create new jobs due to the increase in their exports to China.

Direct supportive measures to create jobs outside of metropolitan areas, such as inducing companies to relocate, should be made to achieve regional equity, Koo added.

BY NA SANG-HYEON [kim.juyeon2@joongang.co.kr]