According to Yonhap News Agency reported on July 1, the Korea Trade Association International Trade and Commerce Research Institute released a report on July 1, last year, South Korea's exports to China (mainland China) decreased by 19.9% year-on-year, the rate of decline in nearly 40 years the most. During the same period, South Korea's trade balance with China for the first time since 1992 from surplus to deficit.

According to the report, South Korea's exports to China amounted to 124.8 billion U.S. dollars last year, down 19.9% from the previous year (155.8 billion U.S. dollars). The trade balance with China posted a deficit of 18.1 billion U.S. dollars, the first deficit since 1992.

This is mainly due to changes in the structure of Korea-China trade and the supply chain structure of Korean companies, the report noted. As China shifted from a major importer of intermediate products to a major exporter of intermediate products, China's imports from South Korea in the areas of raw materials, intermediate products, and consumer goods have been on a downward trend since 2016. Meanwhile, the share of South Korea's intermediate product imports from China rises from 27.3% in 2016 to 31.3% in 2023. Among them, imports of precursors, lithium hydroxide, and cathode materials from China rose from $100 million to $200 million in 2016 to $2.5 billion to $4.9 billion in 2023. During the same period, South Korea's exports of intermediate products to China accounted for a rapidly decreasing share of total exports of intermediate products.

In the face of changes in China's industrial structure, it is necessary for South Korea to promote the diversification of its main export products and actively explore the markets of China's second- and third-tier cities and domestic demand enterprises, the report said.