Korea’s imbalance in exports worsens, raising that much risk: HRI
2018.06.25 14:50:16 2018.06.25 15:45:53
이미지 확대Korea’s Herfindahl-Hirschman Product Concentration Index, a measurement of the dispersion of trade value across an exporter’s products, hit a record concentration level of 1,218, last year. A reading of between 100 and 1,000 does not make a product concentrated and a value of between 1,000 and 1,800 puts it mildly concentrated. The index for product in trade profile jumped last year after sliding from the previous peak of 1,204 in 2010. Product concentration worsened after export reliance on semiconductor shot up from last year amid a boom in chips against underperformance of other traditional export mainstays. In the first five months of the year, the concentration also averaged 1,210 as the share of semiconductors in total Korean exports gained further to 20.3 percent from 17.1 percent last year.
A national economy can shake if the export is led primarily by a single item as it had been the case with Finland whose economy rocked after the collapse of Nokia, said Kim Chun-goo, a researcher at Hyundai Research Institute.
“If Korea’s industrial structure does not diversify or if IT products fall back in competition, the entire national competitiveness would be at risk,” he said.
The Korean exports also remained over-reliant on certain markets, putting it susceptible to trade barriers or slowdown in the trade partners.
Korea’s Herfindahl-Hirschman Market Concentration Index shot up to 1,096 in January-May this year, also the highest-ever as trade growth primarily evolved around China and Vietnam. The share of China against Korean exports hovers at 26.4 percent this year and that of Vietnam at 8.1 percent, sharply up from 10.7 percent and 1.0 percent, respectively.
By Yoon Won-sup and Cho Jeehyun
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