South Korea Reports First Negative Trade Imbalance with China in 30 Years
This is not good for South Korea’s economy by becoming increasingly dependent on Chinese imports, especially semiconductors:
U.S. high-tech restrictions on China are taking a toll on Korea’s trade balance.
For the first time in 30 years, Korea has recorded a trade deficit with China, its biggest trading partner.Exports to the country totaled $13.4 billion in May and imports $14.6 billion, resulting in a $1.1 billion deficit, according to the Korea Custom Service. This month, a $690 million shortfall is forecast.
Joong Ang Ilbo
The government is concerned about the growing trade deficit with China, and the Korea International Trade Association (KITA) Beijing office has started to work on damage assessment.
According to a KITA study, 16.5 percent of Korea’s imports from China were semiconductors, 10.3 percent fine chemicals for batteries and 5.5 percent computers.
Last month, Korea imported $2.4 billion of Chinese semiconductors, a 40.9 percent increase year-on-year. Korea’s No.1 export to China was semiconductors. On year, semiconductor exports to China were up 11 percent.
China has been speeding up its semiconductor localization after efforts by the United States to cut it off from certain key technologies.
The development of semiconductors in China is being pursued much as the country pursued the atomic bomb, the hydrogen bomb and the satellite.
You can read more at the link.
Key words in the disturbing but not surprising news.
The US preventing South Korea from selling strategic key goods to China, like the semiconductors is one big factor. Those supposed semiconductor imports from China are Samsung and SK Hynix chips made in China factories. Pretty soon South Korea will also import EV batteries and chips from the US – made by South Korean companies operating in the US.
Another factor is South Korean companies have been steadily streaming out of China due to worsening business environments brought on by all the COVID lockdowns, as well as US restrictions on China. The US prevents Korean companies in China from doing any business. So the Koreans are packing up and heading toward India.
The US has been pressuring and telling Korea to not do business with China, yet the US is selling all kinds of iPhones and Tesla’s, while the US lowers trade tariffs against China. They’re making other countries not do business with China when they’re the biggest offender when it comes to doing business with China.
That’s why this Yoon fellow is an idiot. Instead of holding multiple cards, he has decided to be the YES man to the US demands. US says to Korea, “I want you to stop doing business with your neighbor which I don’t like, but I want you to create me 150,000 jobs”, and this Yoon idiot will say, “Yes Sir, your highness… please may I kiss your behind?”
The article was only 75% written by wumao.
The Chinese economy is a tottering house of cards just waiting for a strong wind