A new report from the Bank of Korea(BOK) indicates that South Korea will no longer reap the benefits of China’s economic growth through exports.
According to the report released on Monday, the pending difficulty derives from Beijing’s transition from an economic growth engine driven by real estate to one propelled by consumption and high-tech industries that began in the mid-2010s.
The slump in the property development sector subsequently led to a decline in textile, clothing and computer industries, while new growth industries such as electric vehicles, secondary batteries and solar energy have grown significantly.
The BOK also said China’s increased independence in intermediate goods and technological competitiveness will end up expanding competition with South Korea in the global market while reducing reliance on Seoul’s exports.
The central bank suggested that exports to China be expanded with a focus on consumer goods while striving to improve the export structure away from an inordinate dependence on China.