South Korea’s Export Competitiveness Falling
China and Taiwan are ahead of South Korea and Japan in terms of export competitiveness.
The Federation of Korean Industries said on March 31 that China and Taiwan are outdoing South Korea and Japan in terms of export competitiveness.
According to the federation, South Korea’s exports increased 16.1 percent to US$644.4 billion from 2011 to 2021, when those of Taiwan and China jumped 99.1 percent to US$407 billion and 77 percent to US$3.3625 trillion, respectively. Exports from Japan fell 8 percent to US$756.1 billion.
South Korea’s exports accounted for 3.1 percent of the global total exports in 2011 and the ratio fell to 2.9 percent in 2021. The figure of Japan changed from 4.6 percent to 3.4 percent in that period. On the other hand, Taiwan and China increased theirs from 1.2 percent to 2 percent and from 10.5 percent to 15.1 percent, respectively.
When it comes to electrical appliances, which make up the biggest portion of South Korea’s exports (31.2 percent in 2021), Taiwan increased its exports by 129.4 percent from US$76.1 billion to US$174.6 billion and China increased its exports by 59.3 percent from US$445.8 billion to US$710.1 billion from 2011 to 2020. Meanwhile, South Korea and Japan increased their figures by 34.8 percent and 20.8 percent from US$118.5 billion and US$129.5 billion, respectively.
In that period, China’s ratio in the global electrical appliances exports increased by 4.6 percentage points and Taiwan’s increased by 2.7 percentage points while South Korea’s edged up 0.2 percentage point and Japan’s fell 2.4 percentage points.
In the semiconductor industry, exports from China increased 255.9 percent to US$117.1 billion and those from Taiwan increased 246.1 percent to US$123.2 billion whereas South Korea’s rose 108.8 percent to US$82.9 billion and Japan’s decreased 9.7 percent to US$28.9 billion. China’s ratio in the global semiconductor exports rose 7.2 percentage points and Taiwan showed an increase of 7 percentage points while South Korea’s edged up 1 percentage point and Japan showed a decline of 2.9 percentage points.
In that period, China’s annual automobile exports increased 54.1 percent from US$49.5 billion to US$76.3 billion and Taiwan’s increased 53 percent from US$6.6 billion to US$10.1 billion. On the other hand, Japan’s and South Korea’s dropped 17.3 percent and 19.2 percent to US$122.5 billion and US$54.2 billion, respectively.
As for export similarity indices related to electrical appliances, semiconductor products, automobiles and machinery, the export similarity between South Korea and China increased in semiconductor and automobile from 2011 to 2021. The similarity between South Korea and Taiwan rose in semiconductor, electrical appliance and machinery, that between China and Taiwan rose in three out of the four, and that between South Korea and Japan decreased in three out of the four.
“In short, export competition between South Korea and Taiwan is intensifying and, in the semiconductor industry, that between South Korea and each of the other three is intensifying,” the federation explained, adding, “At the same time, China and Taiwan are doing better and better in a number of sectors, including EV battery, petrochemical, steel and shipbuilding.”