{"id":2206681,"date":"2024-10-03T17:54:24","date_gmt":"2024-10-03T08:54:24","guid":{"rendered":"https:\/\/koreapro.org\/?p=2206681"},"modified":"2024-10-03T17:54:24","modified_gmt":"2024-10-03T08:54:24","slug":"south-koreas-export-reliance-on-us-and-china-raises-red-flags","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/10\/south-koreas-export-reliance-on-us-and-china-raises-red-flags\/","title":{"rendered":"South Korea\u2019s export reliance on US and China raises red flags"},"content":{"rendered":"
South Korea\u2019s exports continued their <\/span>upward trajectory<\/span><\/a> in September, driven by a surge in semiconductor shipments and strong demand for automobiles and AI-related products.\u00a0<\/span><\/p>\n However, this success is tempered by the country\u2019s heavy reliance on key markets like the U.S. and China, exposing it to geopolitical tensions and potential supply chain disruptions.<\/span><\/p>\n SEMICONDUCTORS LEAD<\/b><\/p>\n South Korea\u2019s September exports reached $58.8 billion, with semiconductors leading the way.\u00a0<\/span><\/p>\n The $13.6 billion in semiconductor shipments marked an increase of 37.1% year-on-year, setting a new record for the sector. The steady rise in demand for memory chips, particularly those used in AI and high-performance servers, played a critical role in driving this growth.<\/span><\/p>\n The release of new smartphones and ongoing investments in AI services in the U.S. further bolstered South Korea\u2019s chip exports. The memory chip sector, which accounted for $8.7 billion in exports, saw a 61% year-on-year increase.<\/span><\/p>\n These figures indicate that the global appetite for semiconductors remains strong, positioning South Korea to capitalize on its technological strengths in this critical industry.<\/span><\/p>\n GEOPOLITICAL TENSIONS<\/b><\/p>\n Despite robust export growth, South Korea\u2019s economic future is closely tied to its two largest trading partners: the U.S. and China. The ongoing U.S.-China trade war, coupled with <\/span>efforts by Washington<\/span><\/a> to secure technological dominance, threatens to disrupt South Korea\u2019s position in the global semiconductor supply chain.<\/span><\/p>\n The U.S. has imposed strict <\/span>export controls<\/span><\/a> on advanced semiconductor technologies bound for China, which could limit South Korea\u2019s ability to export critical components to its largest trading partner.<\/span><\/p>\n Conversely, China remains a key source of the raw materials and rare earth elements needed for semiconductor production. Any further escalation in tensions between these two powers could jeopardize South Korea\u2019s access to vital resources and disrupt its trade relationships.<\/span><\/p>\n The ROK\u2019s reliance on international supply chains exposes it to a range of risks, particularly in industries like semiconductors that depend on uninterrupted access to materials and advanced manufacturing capabilities.<\/span><\/p>\n The potential for logistical disruptions, such as the <\/span>U.S. East Coast port strikes<\/span><\/a> or Chinese <\/span>export restrictions<\/span><\/a>, poses a significant threat to South Korea\u2019s ability to meet export demand.<\/span><\/p>\n Additionally, South Korea\u2019s energy imports fell by 8.4% in September, which likely signals continued pessimistic business sentiment. In July, the Korea Chamber of Commerce <\/span>reported<\/span><\/a> a 10-point decline in the business sentiment index for the third quarter of 2024, reflecting uncertainty in key sectors, particularly construction.<\/span><\/p>\n