Slumping Korea's exports to China sheds light on challenges of trade partnershipUpdated: 2014-08-22 22:57:21 KST
In a little over two decades, Korea and China saw their trade volume increase 35-fold to over 220-billion U.S. dollars.
Now China is Korea's biggest trading partner in terms of imports AND exports, exceeding the United States and Japan and taking up more than a quarter of Korea's total exports.
Korea is also China's fourth-largest trading partner.
But a recent slump in Korea's shipments to China that plunged seven percent in July, marking the third-straight month of decline point to some challenges ahead.
"The drop is coming from the slide in Chinese outbound shipments as Korean firms largely export intermediary goods to China. But aside from this kind of temporary reason, Chinese firms are now improving their own supply capacity as well."
Adding that old business strategies will no longer sustain shipments to China, experts say the focus should now be on producing high-quality finished goods.
The Korean government is also joining efforts to sustain trade flows that make up half of the nation's output.
Earlier this week, President Park Geun-hye asked Jack Ma, the executive chairman of Chinese e-commerce giant Alibaba, to help Korea's small- and mid-sized enterprises expand into China's online market.
Still, there are opportunities, that could lead to a pickup in exports to China.
"Negotiations for the Korea-China free trade agreement are in the final stages and the deal is expected to take effect as early as next year. The trade pact could boost exports to China."
Experts add the popularity of Korean television soap operas and films in China will make it easier for local exporters to overcome uncertainties in the world's second biggest economy.
Hwang Ji-hye, Arirang News.
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"Chinese firms are now improving their own supply capacity as well."
China is being self reliant. The Juche way. China doesn't need South Korea as much anymore.)