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Korea Warned about Its High Dependency on China

Well-known Chinese news site NetEase (NASDAQ: NTES) recently reported that the Korea Chamber of Commerce and Industry just released a report, warning that, in the past 20 years, South Korea’s export dependence on China for semiconductor products has surged nearly 13 times. The report said that, as South Korea is the fourth largest economy in Asia, Seoul needs to act to address associated risks. South Korea’s increasing reliance on China for value-added industries will increase the risk of South Korea being hit harder if the gap in production skills between the two countries narrows further. The report emphasized that the business community and the government must be fully committed to further technological development. They must take steps to diversify our exports so that China cannot take advantage of this dependence. The 2021 data showed that the precision instrument industry has the highest dependence on China’s exports, accounting for 42.5 percent of the overall exports to China, with semiconductors at 39.7 percent. Since 2003, China has surpassed the United States as South Korea’s largest export destination . Chipmakers are under pressure to side with Washington as the U.S. seeks to counterbalance China as a rising tech power. The report also expressed the concern that South Korea’s trade deficit with China is also growing, despite a surge in reliance on Chinese exports.

Source: NetEase, August 23, 2022