South Korea’s economy is expected for perform better this year as export demand picks up.
GDP increased 2.8 percent in 2013, and HSBC predicts it will see an “export-led recovery” and rise to 3.2 percent this year if manufacturers are able to increase penetration of Chinese markets and benefit from improving consumption in the U.S. and Europe.
“External demand was driven by higher activity in advanced economies, which account for roughly 30 percent of Korea’s export market,” said economist Ronald Man. “But we stress that demand from emerging markets, most notably China, needs to fully recover in order for Korea to maximize its benefits from trade.”
Exports from South Korea to China accounted for 26.1 percent of Korea’s total exports in 2013 — $146 billion out of $600 billion — up from 24.5 percent in 2012. Mobile phones, electronics, cars and auto parts were the leading exports, according to South Korea’s Ministry of Trade, Industry and Energy.
Earlier this year South Korea and China, which are currently in dispute over land, maritime and air space sovereignty in the East China Sea, conducted the ninth round of bilateral talks over a free trade agreement but reported that “no significant breakthrough” had been made.
Sticking points on a comprehensive deal between the countries are South Korea’s desire to protect its agricultural sector from Chinese imports and the concerns of Chinese electronics manufacturers about domestic market penetration by South Korean imports. Further talks are planned in March.
Contact Mike King at email@example.com.