South Korea posts a trade deficit with China for the first time in 28 years as exports of Chinese semiconductor products to the country surge

By Greg Gao

As Chinese semiconductor exports to South Korea surge, the country posted a trade deficit with China in May for the first time in 28 years, South Korean Foreign Minister Park Jin pointed out in a high-level session with his counterpart, Wang Yi, in eastern China’s port city of Qingdao on August 9, reported South Korea media Yonhap News Agency.

South Korean customs statistics showed that, in May this year, South Korea’s exports to China totaled $13.4 billion, and its imports from China reached $14.9 billion, the first time South Korea posted a deficit. The semiconductor products account for 16.5 percent of Korea’s imports from China, a 40.9 percent increase year-on-year, according to a Korea International Trade Association (KITA) study.

Seoul-Beijing relations are facing challenges that are not easy to handle, but the South Korean government will continue to strengthen economic cooperation with China, Park added.

In terms of the environment of South Korea-China trade cooperation, Park said that the international order is in a transition period, the strategic competition between China and the United States is becoming increasingly fierce, the trade order is changing, and the global supply chain is also reorganizing. The uncertain factors that threaten the international order are increasing. The South Korean government will promote the development of South Korea-China relations based on mutual respect and common interests. 

One of the most pressing issues confronting the two countries' chip industries is the U.S. proposal for a semiconductor alliance known as the “Chip 4,” also involving Japan and the Taiwan region.

South Korea has reportedly expressed its intent to participate in a preliminary meeting expected to be held around early September, before deciding formally on whether to join the initiative, Yonhap News Agency said.