Korean trade, challenges in the era of New Normal and its response
|Author||Youn, Woojin||Date||2017.02.13||Issue No||7|
After the world financial crisis, world trade recovered with a V curve. But it became stagnant soon after, and the economic boom, before the financial crisis, terminated.
●A number of trade professionals express their views that that world trade is now turning into the era of New Normal combined with low growth of the world economy.
Recently slowing world trade results from a reduction of imports demand in the emerging markets, for example, investment adjustment of China, etc.
●It also results from sluggish trade in the advanced economies due to a stagnant economic recovery of the EU with imports-intensive industry.
Turing into the era of New Normal, exports of final goods, which are sensitive to economic slowdown of Korea, started to decrease, and growth rate of exports in intermediary goods largely dropped.
●By industry, the electronics industry’s contribution to exports largely decreased, and exports of the shipbuilding industry also became stagnant.
●As world leading businesses in the manufacturing industry focus on the service industry, Korea continued to have a high increase rate of exports in the service industry compared to the manufacturing by the time around the financial crisis.
Korea industry needs strategies to expand production and exports of materials with a high productivity and utility, and intermediary goods with high value-added.
●In order to enhance the global competitiveness of final goods, it is necessary to pay efforts for the development and exports of a high quality and complex products that innovative hardware and customized service are combined.