The COVID-19 crisis sent South Korean exports plunging last month at their sharpest pace since the global financial crisis, signaling a bleak outlook for international trade as the pandemic paralyzes the world economy and shatters demand.
Exports last month fell 24.3 percent year-on-year, trade ministry data showed yesterday, the worst contraction since May 2009, but slightly slower than a 25.4 percent fall tipped in a Reuters survey. They slid 0.7 percent in the previous month.
However, average exports per working day, excluding the calendar effect, tumbled 17.4 percent, far worse than a 6.9 percent fall in March.
Photo: AFP
South Korea, Asia’s fourth-largest economy, is considered a bellwether for world trade and is the first among major exporting economies to release data on shipments.
The grim numbers underline the sweeping effects of the pandemic and point to a rough period for international trade as factories struggle amid collapsing global demand.
“May will be extremely difficult for South Korea’s exports. We could potentially see the dip in shipments bottoming out in May should the US and Europe begin to normalize their economies,” Hi Investment & Securities chief economist Park Sang-hyun said.
“I cautiously expect exports to fall at a slower rate from June, especially on more stimulus from China and as oil prices recover, which should help boost [South] Korea’s petrochemical products,” Park said.
A breakdown of the trade data showed that overseas sales of the country’s top income earner semiconductors tumbled 14.9 percent, while those of oil products, auto components and wireless devices plummeted 56.8 percent, 49.6 percent and 33.4 percent respectively.
By destination, shipments to the biggest trading partner China fell 17.9 percent, even as factories there resumed operations, while those to the US and the EU also slumped 13.5 percent and 12.8 percent each.
Imports last month dropped 15.9 percent, reversing a 0.3 percent gain in the previous month and pushing the trade balance into a US$0.95 billion deficit, its first trade gap since January 2012.
More than 3.27 million people have been infected worldwide, according to a Reuters tally, with nationwide infections in South Korea surpassing 10,700.
The virus pushed South Korea’s economy into its biggest contraction since 2008 in the first quarter, while the business outlook slumped to the worst on record.
Many expect the economy to shrink this year, with the IMF now seeing a 1.2 percent contraction.
Hobbled by the coronavirus, the economies of its two biggest trading partners, the US and China, contracted sharply in the first quarter, suggesting a painfully slow path to recovery for global trade.
Months of pandemic lockdowns across the US and Europe brought factories to a screeching halt, causing unprecedented disruptions for many South Korean businesses, including the nation’s global-trotting tech titans.
Samsung Electronics Co on Wednesday joined other tech giants such as SK Hynix Inc in declining to provide annual forecasts because of uncertainty about the pandemic, but said it expected profit to decline in the second quarter due to slumping sales of smartphones and TVs.
In a recent note to clients, Capital Economics forecast global trade volumes would tumble 20 percent this year, saying it would be “a dreadful year” as major economies struggle to recover from the pandemic.
South Korea has pledged stimulus totaling about 240 trillion won (US$196.4 billion) to tackle the economic slowdown, while markets are betting that the Bank of Korea could ease again in coming months.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained