SEOUL, March 30 (Korea Bizwire) – South Korea is badly in need of exporting more consumer goods to China to help improve a longstanding imbalance between export items and gain a share in the rapidly-growing consumer goods market there, a bank report said Wednesday.
In 2014, Korea topped other countries by posting US$190 billion in shipments to the neighboring country, followed by Japan with $162.3 billion, the United States’ $153.8 billion and Germany’s $104.7 billion. But consumer goods accounted for only 3.7 percent of Korea’s total shipments, according to the monthly report released by the state-run Export-Import Bank of Korea.
“Compared to the advanced countries, Korea is far more dependent on intermediate, or semi-finished, goods in trade with China. A gradual correction is needed for the country’s long-term, balanced exports growth,” said Jo Jae-dong, one of three authors of the report.
Korea’s shipments of intermediate goods to China reached $150.3 billion in 2014, constituting 79.1 percent of its total exports. The figure was bigger than Japan’s 65 percent, Germany’s 47 percent and the U.S.’ 41 percent, the report said.
The analysts advised the government to put more focus on China’s consumer goods market which is expected to grow to $14.4 trillion in 2020 from last year’s $10.5 trillion. Last year, China emerged as the world’s second-biggest consumer goods market after the U.S.
“Korea needs to provide a variety of consumer goods now focused on vehicles and plastic products and advance into more provinces in China, among others,” Jo said. “As China’s purchasing power increases, the demand for quality and luxury consumer goods such as cosmetics, clothes and home appliances will also rise further.”
China’s per-capita income is projected to jump to $10,740 in 2020 from $8,070 last year. Its imports of consumer goods doubled to $156.6 billion last year compared to 2010, the report said.’