Since 2014, Korea’s international trade has continued to trend downward, with the country’s exports projected to slip to $497 billion this year from $572.7 billion in two years ago.
This marks the first year exports has fallen below the $500 billion level since 2010, the Korea International Trade Association (KITA) said on Dec. 5 at the 53rd Trade Day event. During the opening remarks at the ceremony, KITA Chairman Kim In-ho said, “We cannot expect high growth from exports as we have in the past, and we need to find new growth models.”
Amid slow demand from overseas, this year’s export figures have been sluggish, with an 8 percent on-year decline in the first 10 months. For the second year in a row, Asia‘s fourth-largest economy is unlikely to accomplish $1 trillion in international trade.
The country achieved $1 trillion in international trade for four consecutive years after becoming just the ninth country in the world to exceed the $1 trillion milestone in 2011. Korea’s Trade Ministry, along with Korea International Trade Association (KITA), held the 53rd annual Trade Day of Korea at COEX in Samseong-dong, southern Seoul, on Dec. 5, and presented government prizes to 680 entrepreneurs and 1,209 companies that contributed to helping the nation’s exports this year.
The KAI received its first $1 billion Export Tower Award. “Korea is a latecomer in the aircraft market” the company said on Dec. 5. “However, after inking our first export deal to Indonesia in 2001, we exported 137 aircraft to seven countries, reaping $3.4 billion in accumulated export sales.”
Aircraft building was an industry dominated by developed nations. Korea’s aircraft maker penetrated the developing nations markets, including Latin America, the Middle East and Africa. It is also exporting plane bodies and wing parts to Airbus and Boeing. In 2000, right after KAI was founded, exports were only around 90 billion won. The figure increased to 1.8 trillion won last year, accounting for 62 percent of the company’s total revenue.
KAI CEO Ha Sung-yong was awarded the Gold Tower Order of Industrial Service Merit for his contribution to expanding Korea’s international trade. “Boosting total exports is important, but we need to focus on overcoming structural issues.” Kim said.
KITA said the number of people and trading companies getting awards and medals also fell this year, with no firm capturing the Export Tower Award for exporting goods and services over $100 billion.
The winners of the Export Tower Awards for exports totaling more than $100 million this year numbered 1,209 firms, down from 1,929 in 2011, the lowest since 2011 when the number amounted to 1,191.
KITA explained the long-lasting slump in exports resulted in poor records this year.
The number of causes that brought down Korean exports included a fall in exports of new ships, steel products and semiconductor chips, among others, most of them keenly susceptible to changes in economic growth. The number of firms that received Export Tower Awards for $100 million of more this year was 55, less than half the number in 2011 at 129.
However, KITA anticipated Korea will show growth in exports next year, followed by the economic recoveries of the U.S. and newly emerging countries, an increase in global oil prices and the removal of oversupply. “Because Korea is less likely to expect rapid growth than before, we have to find a new growth model.”
KITA Chairman Kim In-ho said in an opening speech at the ceremony. “Quantitative growth of exports is important, but we should try harder to overcome structural problems for the long-term.”
About 1,400 officials from the government and related organizations attended the event, including Prime Minister Hwang Kyo-ahn and Minister of Trade, Industry and Energy Joo Hyung-hwan.
At the event, 30 CEOs received prizes on the platform, representing the 760 meritorious entrepreneurs and 1,209 Export Tower awardees.