Korea Sees Fall in Overall Exports but Jump in High-Tech Exports

While Korean exports fell for a ninth month in July, exports of Korea’s high-tech products have been on a constant rise for the past seven months. Exports to China, the U.S. and Japan slid. Yet, exports of high-tech electronic products such as flat-panels TVs, cell phones, semiconductors and LCD panels have risen.

Exports make up more than half of the Korean economy. Korea has risen to world’s 11th largest exporting country in terms of its relative export volume. Korean exports amounted to $74,700,000,000 in the first quarter.

Korea has done relatively well while other export-dependent economies such as Japan and Taiwan have not done so well. However, with structural problems remaining, I’m concerned about the future export outlook for Korea. Some claims that the global economy has bottomed out, but I don’t see real recovery shaping up. Although the world’s stock market have gained more than 50 percent in the past five months, the general picture of the global economy still remains bleak. The underlying problems that caused the global economic crisis seem to have been left unaddressed.

High-tech exports have held up, yet it seems that this has been largely due to governments’ stimulus measures and a weaker Korean currency. Governments may print money, but they cannot print customers’ buying power. As long as unemployment remains high, the consumption would be unlikely to rise. Many countries may experience stagflation for some time. Korea’s export-driven manufacturing industry is vulnerable to external market conditions.

If the Korean economy is to remain viable, it needs to weather the external conditions and produce real growth coupled with improved fundamentals again.