Korea surpasses Japan in exports to China

Korea has emerged as the largest exporter to China this year, surpassing Japan. It is the first time in 18 years for Japan to lose its lead in exports to China.

Korea is expected to claim “triple crowns” in trade by marking the largest exports, the largest trade surpluses and over 1 trillion dollars in trade volume for three consecutive years. These remarkable accomplishments have been made only in half a century since the designation of Trade Day (then Export Day) to celebrate Korea’s first 100 million dollar exports in 1964.

According to the analysis by the Ministry of Trade, Industry and Energy in celebration of the 50th anniversary of Trade Day Thursday, Korea is estimated to achieve 560 billion dollars in exports and 43 billion dollars in trade surplus this year, which broke its own records of 555.2 billion dollars in exports in 2011 and 41.17 billion dollars in 41.17 dollars in 2010. Despite anxieties in the global financial market caused by the weak yen and the potential withdrawal of quantitative easing in the U.S., Korea’s export has continued to show good performances.

Especially, Korea’s exports to China, which is emerging as the largest market of the world, reached 150 billion dollars during the period between January and October this year, surpassing 133.2 billion dollars of Japan. As a result, Korea is certainly to become the largest exporter to China this year, taking over the lead from Japan. Since 1995 when exports to China by countries were first calculated, Japan has not lost its lead even for once.

Export has driven Korea’s economic development, also known as the ““Miracle of the Han River,” over the last half century. While Korea’s exports stood merely at 24 million dollars in 1954, they dramatically increased with the implementation of five-year economic development plans in 1962. Unlike other development countries, which regulated imports to protect domestic industries, Korea lowered trade barriers and promoted exports. Such a policy approach worked and resulted in dramatic increases in exports from 1 billion dollars in 1971 to 10 billion dollars in 1977.

Korea’s exports slowed down a bit in the aftermath of the 1997 Asian financial crisis, but after painful industrial restructuring, its export continued rapid increases led by key export sectors such as semiconductors, electronics and shipbuilding. In 2011, Korea marked one trillion dollars in trade with 515 billion dollars in exports and 485 billion dollars in imports. Korea, which was only the 90th in the global export market in 1964, became the 12th largest exporter in 2000 and the 7th largest exporter in 2011.

President Park Geun-hye said in the annual ceremony for the 50th Trade Day held at COEX in southern Seoul on Thursday, “Under the goal of becoming the world’s fifth-largest trading power and reaching two trillion dollars in annual trade by 2020, we will march toward ‘the second phase of becoming a trade powerhouse.’” The president emphasized that three major tasks of fostering new export industries, enhancing export capabilities of small and middle-class firms and strengthening a free trade foundation should be carried out to achieve these goals.