South Korea has become the world's sixth-largest exporter
Asean, the European Union and the United States remain the top three countries in China's foreign trade in 2022. The position of China's fourth - and fifth-largest trading partners has been slightly tweaked.
According to the 2022 import and export data released by the General Administration of Customs of China, the trade volume between China and South Korea reached 362.2 billion U.S. dollars in 2022, up 0.1% year on year; Trade between China and Japan was 357.4 billion dollars, down 3.7 percent year on year. As a result, South Korea moved up one spot from China's fifth largest trading partner, overtaking Japan to become China's fourth largest trading partner in 2022. Japan fell to fifth place.
What has happened to Sino-Japanese and Sino-South Korean trade over the past year?
Trade between China and South Korea is gaining momentum
Chen Youjun, a professor at the Shanghai Institute for International Studies, explained that overall, Sino-Japanese trade in 2022 will not fall much compared with the record high of $371.4 billion in 2021. "The main reason why Sino-Japanese trade was overtaken by South Korea last year is that trade between China and South Korea has been stronger in recent years," he said.
According to China's import and export data for the whole year of 2021, the total trade volume between China and Japan at that time was 371.4 billion U.S. dollars, an increase of 17.1% compared with 2020; The total trade volume between China and South Korea reached 362.4 billion U.S. dollars, up by 26.9 percent from 2020. According to the data, trade between China and South Korea continued its previous high momentum last year.
Hwang Fei, a professor at the Seoul Graduate School of Science in Seoul, said that the rapid increase in trade volume between China and Korea in recent years has also led to qualitative improvement. "In terms of structure, the trade volume between China and Korea has changed from simple light industrial and heavy chemical products such as steel plates and fibers to high value-added intermediate materials, led by semiconductors." In terms of China-Korea trade last year, Hwang was impressed by the active investment in China by Korean companies such as Samsung Electronics, SK Group and Hyundai Motor Group in new energy and automobiles.
According to Chen, just looking at the specific figures in 2022, one phenomenon is that China's imports from developed countries are generally declining, while its exports are growing across the board. Data showed that in 2022, China's imports from Japan fell by 10.2 percent, and imports from South Korea by 6.5 percent. "This is directly related to the adjustment of the overseas industrial chain of the above countries, which may cause some products to be reluctant to sell." "In terms of Sino-Japanese trade, China's exports to Japan are mainly automobiles, machinery and electronic products; The main imports are chemical products. If Japan is willing to trade with the Chinese market, the potential of Sino-Japanese trade is not small."
In Chen Youjun's opinion, in addition to being affected by the political factors within the Japanese government, the trend of Sino-Japanese trade is also closely related to the global economy and trade, "if the US economy falls into recession this year, then Sino-Japanese trade will also bear great pressure."
At the beginning of the year, the world's major multilateral economic organizations, including the International Monetary Fund (IMF), all downgraded their economic growth for this year. In addition, Chen Youjun believes that the Russia-Ukraine conflict has a great impact on the global economy, including the trade between China and Japan.
South Korea is the sixth largest exporter
In 2022, Korea's trade balance turned into a deficit due to surging imports of crude oil, natural gas and coal, but overall exports continued to expand due to direct and indirect impacts from the implementation of the Regional Comprehensive Economic Partnership (RCEP). In particular, as exports to ASEAN and Japan have increased, South Korea became the world's sixth largest exporter last year, a new high compared to 2021.
The RCEP will take effect on January 1, 2022, and for South Korea on February 1. According to the UN Conference on Trade and Development at the time, when the RCEP comes into effect, the total trade volume within the region will increase by about US $42 billion. Among the 15 countries that have joined the RCEP, South Korea will be the third largest beneficiary, with intra-regional trade increasing by about $7 billion, after Japan's $20 billion and China's $11 billion. As a result, Korea s exports to the ASEAN region alone increased by more than 16 billion dollars last year.
Buoyed by positive factors such as the effective implementation of the RCEP, the ROK achieved encouraging export results last year. According to the Ministry of Trade, Industry and Energy, South Korea's exports reached 683.9 billion dollars last year, setting a new annual record. The ranking of global exports increased by one place from 2021 to the sixth place in the world, next to China, the United States, Germany, the Netherlands and Japan, further consolidating its position as a major exporter.
Regionally, South Korea's exports to China, ASEAN and Japan, which are RCEP members, total about $311.4 billion, accounting for almost half of South Korea's total exports. Korea s largest export destination was China with 155.81 billion dollars. The fastest growing region was ASEAN, with exports reaching $124.95 billion, the highest ever recorded, up 14.8 percent. South Korea's exports to ASEAN, including semiconductors, displays, and petroleum products, have continued to grow thanks to tariff cuts brought about by the implementation of the RCEP. Based on the high growth base of exports to ASEAN in 2021, South Korea has updated the maximum export figure for two consecutive years.
Another important value of the RCEP for South Korea is that it opens a breakthrough for South Korea to expand exports to Japan. Although tariff cuts are a slow, drawn-out process with some delays, South Korea's exports to Japan have grown for the second year in a row, reaching $30.63 billion last year.
Japan is Korea's major agricultural export market, and the implementation of the RCEP will further expand the survival space of Korean agricultural products in Japan. According to the RCEP, Japan has opened its doors to Korean agricultural products such as soju, rice wine, sake, pears and mushrooms, and these products can be easily bought at convenience stores and supermarkets in Japan. Some supermarkets even have Korean soju counters. Korean alcohol products are becoming hot sellers thanks to the popularity of Korean dramas in Japan.
To maximize the benefits of RCEP to Korean companies, specialized agencies including the Ministry of Trade, Industry and Energy, the Korea Customs Service, the Korea Trade and Investment Promotion Agency, and the Korea International Trade Association jointly issued the Joint Guidelines on RCEP Utilization. It also explained in detail the strategies for applying the RCEP rules, the precautions for verifying the origin of the RCEP rules, and the strategies for applying the rules in other countries.
In addition, the Ministry of Trade, Industry and Energy and the Korea Trade-Investment Promotion Corporation opened a support center for the Use of RCEP in Tokyo last November to provide consulting services such as certificate of origin, customs clearance, and removal of non-tariff barriers for Korean exporters in order to make it easier for Korean companies to enter the newly opened Japanese market.