[Graphics by Song Ji-yoon]
South Korea’s reliance on Japan for materials and components has fallen to an all-time low nearly two years after Tokyo’s export curbs on high tech materials thanks to Seoul’s prompt move to enhance the country’s self-sufficiency in material and component supplies and diversify suppliers.
According to data from the Ministry of Trade, Industry and Energy on Thursday, the country imported $9.7 billion worth of materials and components from Japan between January and April, accounting for 15 percent of the country’s total material and component imports of $64.8 billion. The share of Japanese material and component imports declined 1.1 percentage points from the same period a year ago, and it was the lowest since the ministry began compiling related data in 2001.
Korea’s component and material imports from Japan took up an all-time high of 28.0 percent in 2003 before falling to 18.2 percent in 2014. Its reliance fell to the 17 percent range in the following years and 15.9 percent in 2019.
The share of material and component imports from Taiwan, on the other hand, increased from 8.3 percent last year to 9.3 percent this year, and that from China from 29.1 percent to 30.1 percent.
As part of efforts to cope with Japan’s stricter trade restrictions against Korea on three key high-tech materials two years ago, South Korea has put out efforts to improve sourcing capacity by diversifying supply chain and expand support and investment in tech localization.
Against such backdrop, Korean companies were able to successfully reduce reliance on Japanese imports and increase domestic production of core materials and components. They also diversified import sources of various key items.
Korea’s materials and components trade with Japan, however, recorded a deficit of $5.4 billion between January and April, up $709 million from the same period a year earlier.
Korea shipped $ 4.3 billion worth of components and materials to Japan this year, up 6.2 percent from last year, but its imports from Tokyo more than doubled its exports.
Major deficit items were electronics components ($1.9 billion), general machinery components ($6.4 billion), chemical substances and products ($1.3 billion), and rubber and plastic products ($578 million).
The deficit in components and materials was still the main cause of Korea’s trade deficit with Japan that stood at $7.9 billion in the first four months of the year.
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]