As the world eagerly anticipates the unfolding economic narratives of 2024, South Korea has emerged as a beacon of growth amidst a backdrop of global uncertaintiesThe Ministry of Trade, Industry and Energy of South Korea recently disclosed figures that reveal an astonishing export figure of over $680 billion—a remarkable 8.2% increase compared to the previous year, establishing a new historical recordThis feat not only reverses the troubling downturn of exports in 2023 but also underscores South Korea's resilience and competitiveness in the international marketplace.
At the core of this growth story lies the country’s flourishing semiconductor industry, which has experienced phenomenal successIn 2024, exports of semiconductors surged past $140 billion, accounting for approximately 20.7% of South Korea’s total exportsImpressively, this sector witnessed a staggering year-on-year growth rate of 43.9%. Despite a general decline in global semiconductor chip prices, the robust demand for advanced products, particularly high-bandwidth memory chips, has acted as a significant driver for South Korea's semiconductor sector
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Analyzing the geographical distribution of these exports reveals notable engagement with its largest trading partner, China, where exports rose by 6.6% to reach $133 billion, largely attributed to shipments of chips and petrochemical productsMeanwhile, exports to the United States also flourished, climbing 10.5% to $127.8 billion, marking the seventh consecutive year of record-breaking exports.
Furthermore, the shipbuilding sector has proven to be another pillar of South Korea’s export successShipbuilding exports advanced by 18% in 2024, driven by a significant surge in orders for liquefied natural gas (LNG) carriers and large container ships, solidifying South Korea's position within the global shipping marketData from the Korea Shipbuilding and Offshore Engineering Association indicates that new orders received by South Korean shipbuilders increased by 9.1% year-on-year, totaling 10.98 million compensated gross tons, with completed ship output climbing 22.1%. Major players in the industry, including HD Hyundai Shipbuilding, Hanwha Ocean, and Samsung Heavy Industries, are projected to generate profits in 2024, buoyed by rising demand for high-value vessels and a marked increase in new shipbuilding prices over the last four yearsMeanwhile, the exports of marine engines reached a decade-high, adding significant contributions to South Korea's foreign tradeThe new shipbuilding market has entered what is referred to as a 'super cycle,' with the Clarkson Newbuilding Price Index reaching 189.2 in December 2024, closely approaching its historical peak of 191.5. Coupled with favorable exchange rates, these factors contribute significantly to the advancement of South Korea's shipbuilding industry.
However, not all sectors within the economy are experiencing growth
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The automotive industry presents a more subdued performanceAccording to data from the Korea Automobile Manufacturers Association (KAMA), the total exports of six major domestic auto manufacturers, including Hyundai Motor and Kia, stood at 2.7826 million vehicles in 2024, which marked the highest total since 2015, yet represented a mere 0.6% increase over the previous year—far overshadowed by an overall projected growth rate of 20.3% for 2024. KAMA cited a resurgence in demand from the North American market, coupled with continued strong sales of SUVs and hybrid vehicles, as the principal drivers of this limited growthMeanwhile, exports beyond North America have struggled, compounded by a slowdown in electric vehicle demand, contributing to the subdued overall growth.
Looking ahead to 2025, South Korea's external trade landscape is characterized by both challenges and a degree of optimismMajor trade institutions within the country are predicting further export growth, albeit at a decelerated paceThe Korea Trade-Investment Promotion Agency (KOTRA) anticipates that South Korea's total exports will reach around $730 billion in 2025, reflecting a 2.6% year-on-year increaseYet, the South Korean economy is presently confronted with multiple uncertainties, including a slower global economic growth, a deteriorating international trade environment, and the possibility that a new U.S. administration might revive broad tariff policiesSuch factors introduce unpredictability to the future economic climateIf tariffs on imported vehicles from South Korea were to materialize, automakers like Hyundai and Kia could face significant financial setbacks, with estimates suggesting that a 10% tariff could reduce their operating profits by more than 4 trillion won (approximately 202 billion CNY).
In the face of these intricate domestic and international developments, South Korea maintains a proactive stance
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