South Korea’s exports of computers, display panels and home appliances could weaken later this year as a result of declining global demand and growing tensions between the US and China, a new report has warned.
But other sectors — secondary cell, automobile, semiconductor and shipbuilding industries — would fare better and expect to enjoy an upward trend at least until next year, according to the according to the report released on Tuesday by the Federation of Korean Industries.
The report’s results were based on the federation’s survey of senior researchers at a dozen securities companies on prospects of some of the country’s main exports.
Kim Bong-man, head of the international affairs division at the federation, urged the government to provide help for South Korean companies.
“South Korea’s exports are breaking records day after day even when the coronavirus pandemic isn’t over, but a crisis can arrive at any time,” Kim said.
“The government should provide support for South Korean export companies to operate their business smoothly while actively responding to the rise in protectionism and the US-China conflict.”
The report also sounded an alarm for the biotech and health care sectors that would likely take a hit as exports of COVID-19 self-test kits will likely dwindle while the global vaccine rollout gathers speed.
Seven in 10 experts said South Korean export companies are expected to excel in the secondary cell industry until the second half of 2023 or even after 2024.
The confidence in the market comes as the global electric vehicle market has enjoyed a rapid growth in recent years and South Korean battery makers have gained competitiveness, the report said.
Semiconductor shipments, the country’s biggest export products, are set to enjoy a growth until the first half of 2022 due to high demand of DRAM, though its growth could drop later in the same year following a possible unit price drop.
The report, citing experts, said recent export growths are largely a result of a “base effect” — a situation where a bump or drop in growth can appear exaggerated due to the choice of data points.
It also urged the government to ease regulations as part of efforts to give export competitiveness to South Korean companies.
Improving trade conditions with export partners and expanding research and development investments were among the actions suggested.