With China as its biggest export market, South Korea has inevitably been hit by the slowdown in the growth of the world’s second-largest economy.
Preliminary figures show South Korea’s exports in January fell 18.5 percent from a year earlier.
The drop, the sharpest since August 2009, is also the 13th consecutive contraction in the country’s monthly exports, the Hong Kong Economic Journal reported.
Exports to China plunged 21.5 percent last month. About one-quarter of South Korea’s shipments are destined for China.
South Korea’s main exports — including smartphones, cars, semiconductors and display panels — performed badly.
Faced with the potential of a further slowdown in China’s economic growth and a weaker renminbi, South Korea may have to brace for a further decline in its exports.
Pressure from its main export rival, Japan, is also mounting.
The Bank of Japan set a negative interest rate last week in an attempt to revive the country’s sagging economy.
The move could push down the yen and pose a stiffer challenge for South Korean exporters.
The United Nations Comtrade database shows South Korea has the biggest export similarity (59.9 percent) with Japan.
This also means the Korean won is vulnerable to depreciation pressure.
The currency has weakened more than 2 percent against the US dollar since the start of the year, after falling more than 7 percent last year.
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