South Korea exports fall for eighth month in a row on trade angst
South Korean exports declined for the eighth consecutive month in July, as the country grapples with a cyclical downturn in the computer chip market, China’s slowing economy and uncertainty amid the simmering trade dispute between Washington and Beijing.
The country, Asia’s fourth largest economy, is at the heart of the electronics supply chain and its export data can provide an early signal for economic growth in the region.
Exports totalled $46.14bn in July, down 11 per cent from $58.88bn in the same period a year ago, but above the 13.7 per cent year-on-year fall in June, according to government data.
Semiconductor exports – which make up about a fifth of the country’s exports and jumped by almost a third during 2018 from booming memory chip sales— were down 28 per cent in July. Shipments to China – which account for more than a quarter of the country’s exports – fell 16 per cent. Auto exports remained a brighter spot, up 21.6 per cent.
The export data comes just a week after the country’s central bank reported that GDP growth returned to positive territory in the second quarter, growing 1.1 per cent compared with the first quarter, when it suffered its sharpest contraction since the global financial crisis.
While heavy government spending has helped buoy the economy, a spiralling dispute with Japan has cast further uncertainty on electronics manufacturers with fears Tokyo will expand export controls on key supplies to the sector.