• A
  • A
  • A
  • ABC
  • ABC
  • ABC
  • А
  • А
  • А
  • А
  • А
Regular version of the site

Article

South Korea trade during COVID-19 pandemic: perspectives on value chains and US-CHINA trade war

Asia and Africa today. 2021. No. 2. P. 36-43.
Коргун И. А.

This paper analyzes South Korea’s foreign trade during the first half of 2020. The goal is to highlight an early effect of the COVID-19 pandemic on the geographical and structural patterns of Korea’s export and import. This analysis is done in order to investigate whether there is a trend towards re-structuring of Korea’s value chains away from China. The need to diversify production links and increase cooperation with other countries in Asia was widely discussed in Korea during the pandemic as the country experienced a shortage of supplies and factory closure as a consequence of China’s lockdown. This research looks for early signs of transformation in terms of geography and composition of traded products and places those signs into the context of global and regional value chains and the US-China trade war. Given Korea’s strategic alliance with the US and economic importance of both the US and China for its export-driven economy, Korean companies have to make choices about how their value chains will look like in the near future.

The paper finds evidences that point into the direction of growing linkages between Korea and South-East Asian economies in the first half of 2020. But contrary to expectations, overall trade ties with China remain quite strong. It is likely that in the following years Korean businesses will follow a two-track approach: those that aim to sell to Chinese domestic consumers will keep their production in China while those companies that export from China to the US and EU will continue to diversify their manufacturing base in order to keep access to advanced markets.