| Korea`s import dependence on Japanese materials and components fell to its lowest since related data started to be compiled. Meanwhile, imports of Chinese materials and components are increasing due to their rising quality competitiveness.
According to the "Materials and Components Trade Trend during the First Half of 2014," released by the Trade, Industry and Energy Ministry on Monday, Korea`s trade deficit with Japan in materials and components reached 78.9 billion U.S. dollars, falling 12.8 percent year-on-year. Dependence ratio on Japanese materials and components was 18 percent, the lowest since related statistics started to be tracked in 1994.
Dependence ratio on Chinese materials and components reached an all-time high at 28.3 percent over the same period. Since imports from China surpassed those from Japan for the first time in 2008, the trend began enjoying a dominant market position in 2011. Chinese electronics parts and chemicals are fast replacing Japanese. In the first half of this year, imports of parts and chemicals from China rose 26.9 percent and 11.5 percent, respectively, whereas imports from Japan declined by 16.7 percent and 9.6 percent, respectively.
Sharp increase in the quality of Chinese materials and parts is the major reason. Under the "China inside" strategy, the Chinese government has set up a goal to increase share of China-made key components and new materials up to 80%. Chinese materials and components have high price competitiveness, which, coupled with higher quality, can deepen Korea`s reliance on China.
A ministry source said, "Chinese components lag behind Korean counterparts in terms of value-added, but quality is fast improving," adding, "We are monitoring to restrain too-weighted imports from a specific country."