South Korea’s exports to China dropped last month, highlighting the impact that COVID-19-related lockdowns in Chinese cities are having on supply chains around the region.
Shipments to China fell 3.4 percent from a year earlier, compared with a 16.6 percent gain in March, the South Korean Ministry of Trade, Industry and Energy said in a statement yesterday.
Overall exports advanced 12.6 percent last month, while semiconductor sales increased 15.8 percent.
Photo: EPA-EFE
South Korea is a barometer of worldwide demand, with its manufacturing capability ranging from chips to displays and refined oil. The diversity of destinations for its overseas shipments also means its trade performance is something of a heat map for global economic activity.
Demand has been softening in Europe and China since Russia’s invasion of Ukraine, as more Chinese cities go into lockdown under the country’s “zero COVID” policy. These twin risks to the global economy have further inflamed inflationary pressures and triggered renewed disruptions in supply chains.
Still, a strong recovery in the US has helped maintain momentum for South Korean exports. Demand for technology products such as displays and semiconductors also remains resilient, allowing major exporters like Samsung Electronics Co to report a surge in earnings.
South Korea’s heavy reliance on trade means it needs exports to hold up to prevent the economy from slowing further, and provide scope for the Bank of Korea to stick to its path of policy normalization.
The central bank is scheduled to meet this month and is battling to rein in unexpectedly strong inflation. It has been among the early movers in raising interest rates.
Sunday’s data also showed average daily shipments increased 15 percent last month from a year earlier.
Total automobile exports advanced 6.1 percent last month, while shipments of wireless communications devices rose 8.3 percent.
Overall exports to the US gained 26.4 percent, while those to Japan increased 6.2 percent and to the EU they were up 7.4 percent.
Exports to the Commonwealth of Independent States fell 46.5 percent.
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