South Korea’s export growth surged last month, driven by record demand from the US and a slowdown in China’s recovery efforts. Data released by the customs office indicated an 11.3 percent increase in shipments when adjusting for working-day differences. Without the adjustment, exports rose by 13.8 percent, resulting in a trade surplus of $1.5 billion.
The US emerged as the top destination for South Korean products, with exports reaching an all-time high of $11.4 billion in April, representing a 24 percent year-on-year increase. Meanwhile, exports to China stood at $10.5 billion, growing 9.9 percent from the previous year. This shift marked the third consecutive month where exports to the US surpassed those to China.
The geopolitical tensions between the US and China have placed South Korea in a favorable position, benefiting from the US infrastructure boom and increased demand for products such as semiconductors and electric cars. Seoul has navigated these tensions strategically, capitalizing on the US market’s demand for South Korean goods.
On the other hand, China’s struggle to bounce back from a consumption slowdown has affected its import demand, making it challenging for companies like Samsung Electronics Co. and Hyundai Motor Co. to penetrate the Chinese market. South Korean exporters have capitalized on the strong demand in developed economies like the US, contributing to the 1.3 percent economic expansion in the first quarter.
Semiconductor sales have been a driving force behind South Korea’s export growth, with memory chips experiencing a significant surge in demand. Additionally, Taiwan reported a robust economic expansion in the first quarter, fueled by the global demand for AI-related technologies.
Despite the positive outlook for South Korea’s export-driven growth, the declining value of the won against the dollar poses challenges for smaller companies and importers. While major corporations like Hyundai Motor Co. have benefited from the weakened local currency, others are grappling with increased costs of raw materials and energy.
In conclusion, South Korea’s export growth is on an upward trajectory, propelled by strong demand from the US and the rebounding semiconductor market. The country’s strategic positioning amidst global trade tensions and economic dynamics has enabled it to capitalize on emerging opportunities and drive economic expansion through exports.
