Korean report: The recovery of demand in China's IT industry is expected to drive an increase in South Korea's exports to China

According to Yonhap News Agency on the 18th, a report released by the Korea Trade Association's International Trade and Commerce Research Institute showed that the recovery of demand in China's information and communication technology (IT) industry this year is expected to drive an increase in South Korea's exports to China.
According to a report released by the Korea Trade Association's Institute of International Trade and Commerce on the 18th, "China's IT demand is expected to recover at a rate of 9.3% this year, higher than the global average of 6.8%." Therefore, South Korea's IT exports to China are expected to increase significantly. The report shows that in 2023, South Korea's total exports to China decreased by $31 billion compared to the previous year, with IT product exports decreasing by $19.8 billion, accounting for 64% of the total decrease. Last year, 13 out of the top 20 major products exported by South Korea to China had a decrease in market share, with a particularly noticeable decline in products such as monitors, computers, and semiconductor equipment. Therefore, the recovery of Chinese IT demand is expected to drive the recovery of South Korean exports to China.
However, the Korea Trade Association predicts that although there may be significant improvements in exports and trade balance with China in the future, it may be difficult to maintain the previous large-scale trade surplus. South Korea's Kyongjo News reported that the weakening of export product competitiveness has become a stumbling block for South Korea to improve its trade balance with China. The analysis by the Korea Trade Association shows that among the factors contributing to the decrease in exports to China, the weakening of the competitiveness of Korean products accounts for 31.9%. South Korea lags behind ASEAN in petroleum products, computers, and steel products, while it lags behind Japan and Germany in optical instruments and semiconductors. The Korea Trade Association explained that the advantage of high cost-effectiveness in Korean products is gradually weakening, and coupled with the increasing competition between the main industries and China, the weakening of export competitiveness is likely to occur in more varieties of products.
While the weakening competitiveness of South Korean products has an impact on exports, Yonhap News Agency mentioned that the sharp increase in imported secondary batteries and other products from China is a factor leading to significant changes in South Korea's trade balance with China. Last year, South Korea's trade deficit with China increased to $16.4 billion only in the field of "electric power products" such as cathode materials, lithium-ion batteries, and electric vehicles. This number is almost on par with South Korea's total trade deficit with China last year ($18 billion).
The Korean Daily quoted Kim Yu jung, a researcher at the Korea Trade Association, as saying that China remains the largest export market for South Korea, so it is necessary to predict local consumption trends and changes in import structure, and make efforts to adjust South Korea's export structure. In order to give South Korea a comparative advantage in future industries, a comprehensive national strategy should be formulated to cultivate domestic technical talents and expand research and development investment.