Asia Minute: South Korea marks a China anniversary with very different exports
Wednesday marked a noteworthy anniversary in the Asia-Pacific. Thirty years ago, South Korea and China established diplomatic relations — and started to deepen economic relations. Trade between the two countries has exploded, but the nature of South Korea’s exports has changed a great deal.
Back in 1991, South Korean exports to China amounted to about $1 billion a year. Today, they’re more than $162 billion a year.
But the trade figures of the last few decades also tell a story of a different kind of economic growth — higher up the value chain.
According to a research group called the Observatory of Economic Complexity, a little more than 25 years ago, South Korea’s leading exports to China were fabric.
It was mostly the raw material for clothing: synthetic yarn, plastic coated textile fabric, rubberized knitted fabric.
These days, those exports are all about semiconductors.
Earlier this week, The Korea Chamber of Commerce and Industry reported that 40% of all South Korean semiconductor exports last year went to China.
South Korean chipmakers are key suppliers to China’s smartphone industry.
It’s a delicate business — especially when the United States is putting a renewed emphasis on technology supply chains that involve allies.
Just last week, South Korea’s Foreign Minister said his country will send officials to a preliminary meeting of international semiconductor makers the United States has organized called “Chip 4.”
The group includes The United States, Japan, South Korea and Taiwan.