Eight New Industries Emerge as Export Growth Engines

https://korean-machinery.com///inquiryThe eight new industries related to the 4th Industrial Revolution, such as robots and electric vehicles, are emerging as new export growth engines of Korea, while contributing to an increase in jobs.
According to the report, “Trend Analysis of Job Creation in the Eight Emerging Export Industries and Trade with China” published by the Institute for International Trade (IIT) of the Korea International Trade Association (KITA), exports of the eight emerging industries in Korea have increased from an average of US$47.8 billion in 2014 to US$73.6 billion in 2017. The share of total exports rose from 8.3% to 12.8%. In particular, exports of the eight emerging industries increased by 27.7 percent last year, creating 415,000 jobs.
The figures for employment inducement per US$ million of exports also increased considerably from 5.16 persons in 2014 to 5.63 persons in 2017. The largest employment inducement figure was recorded in the next-generation semiconductor sector, while the robot industry was found most effective in inducing employment. The employment inducement figures were the largest in the next-generation semiconductor sector (188,000), followed by nextgeneration display (8.0 million), new energy (4.5 million) and bio-health (4.3 million) in 2017. Inducement per US$ million of exports varied relatively largely ranging from 10.7 in the robot sector, 9.7 for electric cars, 9.4 for bio-health, and 8.7 for nextgeneration display in 2017.
Last year, exports of the new industries have shown outstanding results in all the eight sectors and major regions of the world except Japan.
By sectors, exports of electric vehicles (186.8%), aerospace (37.3%), robots (36.2%), next-generation displays (34.4%), next-generation semiconductors (27.1%), new energy products (23.7%), high-tech materials (15.2%), and bio-health goods (13.7%) have grown in more than double-digit figures. Among the developed countries, on the other hand, the USA (29.2%), the EU (34.6%), and Vietnam (87.8%), which are emerging as overseas production bases for Korean companies among rising countries, have increased their exports to ASEAN nations (48.5%) and India.
Exports of the eight new industries to China grew at a CAGR of 5.2% from US$ 17.4 billion in 2014 to US$ 20.3 billion in 2017. Revenues for the same period increased by an annual average of 24.6%, from US$ 3.9 billion to US$ 7.5 billion. The increase in imports outstripped the growth in exports. This reflects China’s relentless pursuit in the new industries.
Exports of new industries to China amounted to 27.6% in 2017, which was 2.8% higher compared to exports of all sectors to China (24.8%). In particular, the dependence on exports of next-generation displays (37.6%), advanced materials (36.0%) and nextgeneration semiconductors (29.8%) to China turned higher than 30%, underscoring an urgent need for market diversification.
“Nurturing the new industries requires a management strategy aimed at overseas markets that can manifest the scale-oriented economy from the earliest stages,” said Moon Byung-gi, a researcher at the IIT of KITA. “In order for the new industry to continue to grow and create employment, It is necessary to establish a system for effective cooperation and division of labor such as joint investment and technical cooperation between Korea and China along with the development of composite materials, parts and products matching with the trend of the 4th Industrial Revolution.”

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Automotive Parts Industry’s Trade Surplus Steadily Shrinks, Falling by 7.5% from the Previous Year

https://korean-machinery.com///inquiryAs the imported car market grew and overseas sales of Korean cars slowed down, the nation’s trade surplus in the auto parts sector has been on a steady decline.
According to recent statistics released by the Korea International Trade Association (KITA), Korea’s trade surplus of automobile parts by the end of May this year stood at US$7.54 billion, a 7.5% drop from the same period of last year.
Exports of automotive parts this year were US$ 9.949 billion, down 4.2 percent from the previous year, while imports of automotive parts sat at US$ 2.408 billion, up 7.6 percent from last year.
In fact, Korea’s auto parts exports have been on a decline since peaking at US$ 27.96 billion in 2014. In 2015, exports of auto parts were US$ 26.84 billion, down 4.2 percent from the previous year. They contracted 4.6 percent in 2016.
On the other hand, imports of automobile parts have been on a sharp rise in recent years. Despite a drop of 3.7 percent from a year earlier to US$ 5.095 billion in 2015, and last year, imports of auto parts were US$ 5.53 billion, up 8.6 percent from a year earlier.
As a result, Korea’s trade surplus in the auto parts sector is decreasing year by year. The surplus hit a record high of US$ 22.67 billion in 2014 and slid to US$ 21.79 billion in 2015 and US$ 20.31 billion in 2016.
The surplus has dropped for the third consecutive year this year. If this trend holds, this year’s trade surplus is expected to fall below US$ 20 billion within six years since chalking up US$ 17,151 million in 2011.
On the other hand, Korea imports high-tech auto parts mainly from Japan, the USA, Germany and France among others. Emerging markets such as China, Mexico, and Romania export low-priced auto parts to Korea.

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Korea’s determination to become a member of TPP

Korea is preparing to join the Trans-Pacific Partnership (TPP) according to data recently released by the Korea International Trade Association (KITA).

According to Korea, by joining the partnership, could accomplish a 2.2 percent increase in gross domestic product by 2025. The TPP consists of 12 member countries, including the United States, Canada, Japan, Australia, New Zealand, Singapore, Chile, Peru, Brunei, Vietnam, Malaysia and Mexico.

The members account for about 37 percent of the world’s GDP and 30 percent of foreign direct investment. The agency recently released its official estimation that the TPP could help Korea be more price-competitive with longtime rival Japan.

Korea already has massive demand from the 12 TPP members for completed products worth $9 trillion and materials and parts worth $2.2 trillion, also forecasting an obvious challenge – Japan can only obviously gain many benefits from trading with TPP member countries as the nation also manufactures similar products to Korea’s.

TPP countries will not levy tariffs on materials and intermediate goods produced by each other. According to KITA, TPP members procure about 5 percent of their intermediate goods such as materials and parts from Korea and 6 percent from Japan. And this year, KITA has a positive forecast on Korean trade, with exports estimated to jump 4.3 percent to break the $600 billion mark for the first time and imports forecast to jump 5.5 percent to $557 billion.

 
 
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About KITA & Its Main Activities

Founded in 1946, KITA is the largest business association and one of the most influential economic organizations in Korea, with 65,000 member companies and numerous offices in Korea and abroad. The organization’s key roles are two-fold: providing support for member companies and working to remove obstacles that prevent trade and international commerce; and on the global level, promoting free trade and facilitating the signing of free trade agreements between Korea and its trading partners around the globe.

With its headquarters located in the Korea World Trade Center in Samseong-dong in the heart of Seoul, as well as 11 offices in South Korea and seven branch offices abroad, KITA collects, analyzes and publishes economic data and surveys that help its members make informed and accurate business decisions. The association oversees trade fairs and exhibitions that involve its member companies, provides consultation for developing overseas markets, and acts as the link between Korean and foreign companies, and government agencies involved in commerce and trade.

kita

The services provided by KITA are indispensable resources for Korean companies operating abroad. The association provides translation services, web site creation and maintenance support, human resource management support, and a wide variety of other programs designed to aid day-to-day business operations. KITA also utilizes the network of Korean expatriates and Korean-owned businesses abroad to manage a cooperative matrix of Korean firms and entrepreneurs who have already blazed a path in the global market.

In recent years KITA has expanded its resources online to provide timely and on-site support to its members. Tradekorea.com, a new B2B website, e-catalogues and other information resources make up the association’s global export support package that helps companies compose offers, inquiries, contracts and other vital documents as well as establish marketing programs and expansion strategies.

 
 
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