Chart of the Week: South Korea’s exports

As you can see in the chart below, South Korea’s 20-day exports contracted sharply in August (-13.3%), dragged by lower demand from China and Japan, and negative trend in the semiconductor industry. The amplitude of contraction in total exports is similar to that of 2015-2016.

Exports to China, which is South Korea’s number one client representing about 25% of total exports, fell minus 20% YoY this month. Over the same period, exports to Japan decreased by 13.1% YoY, after a short-lived rebound.

Looking at the semiconductor industry, the picture is even gloomier with semiconductor exports collapsing by minus 29.9% YoY.

Digging into data from the MOTIE (Korea Ministry of Trade, Industry and Energy), we notice only one real bright spot: exports to Vietnam increased by 8.7% YoY, which can be explained by the fact that many South Korean high-tech companies are sending components to be assembled there. As we have discussed previously, Vietnam is a key regional powerhouse maker of smartphones and other high-tech gadgets.

Excepted for Vietnam, all the other main trade partners are going through a sharp contraction.