South Korea’s exports to China rose 14.9 percent year-on-year to $11.4 billion in July, Yonhap news agency reported Thursday, citing data from the Ministry of Industry, trade and resources and the Korea Trade Association, the highest since October 2022. South Korea’s cumulative exports to China in the first seven months of the year reached $74.8 bn, outpacing exports to the US of $74.5 bn, again overtaking the US as South Korea’s largest exporter, thanks to its performance in July.
According to a report by the Yonhap News Agency, China and the United States are the two largest trading partners of South Korea. China has long maintained its position as the largest export destination of South Korea, but with the rapid development of Chinese industries, the competitiveness of the manufacturing industry has greatly increased, the Means of production is also much more self-sufficient, a change in industrial structure that has contributed significantly to the contraction in South Korean exports to China, which the US overtook last year as the country’s largest exporter for the first time in two decades. In the first half of this year, South Korea’s exports to the US were $64.3 bn, higher than its exports to China of $63.4 bn. But that pattern was broken again in July, thanks to a surge in South Korean semiconductor exports to China. South Korea’s semiconductor exports to China jumped 39.1 per cent in July from a year earlier to $3.25 bn, accounting for nearly 30 per cent of the country’s exports to China, directly helping South Korean exports to China to overtake those to the US again in the first seven months of the year.
China is an important global production base for Apple, despite a supply chain restructuring triggered by trade friction between the US and China, South Korea’s Asia daily reported Thursday, at the same time, IT is also the production base of various information technology (IT) products and a huge consumer market, China’s position as the“Workshop of the world” remains stable. South Korea’s position in China’s import market has rebounded as its exports of IT intermediate products such as memory chips, wireless communications equipment parts and display screens to China pick up again. Reported that, as the semiconductor industry in the second half of this year continued to strengthen, South Korea’s exports to China is expected to improve the situation will continue.
However, Korean semiconductor exports to China will inevitably be affected by the U. S. policy of repression. In October 2022, after the United States restricted the export of advanced semiconductor equipment to China, it began to coerce allies like the Netherlands, Japan and South Korea to adopt similar policies to restrict China. Last October, the US decided to extend indefinitely exemptions for imports of US chip equipment from Samsung Electronics and SK Hynix plants in China because of the scale and impact of South Korea’s semiconductor investments in the country. But this year, the United States, believing that South Korea could become a loophole in its export controls to China, began demanding that South Korea strengthen its export controls on semiconductors to China, Bloomberg said, objects include logic chips that are more advanced than 14 nanometers and products like DRAM that are more advanced than 18 nanometers. The U.S. government may announce as soon as the end of September that it will add high-bandwidth memory (HBM) devices made by South Korean companies to its list of targets for chip restrictions on China, Bloomberg said, citing people familiar with the matter.
HBM is an indispensable component for manufacturing AI accelerators, mainly supplied by Samsung Electronics, SK Hynix and micron storage. According to the Asia Daily, the South Korean government has been cautious ahead of the U.S. announcement, but believes the impact of new U.S. sanctions will be limited because advanced semiconductor products account for a relatively low share of exports to China.