S Korea exports fall on China slowdown and holidays in May
Growing shipments to Europe and US underpin a sustained recovery in advanced economies
South Korean exports last month suffered their worst decline in eight months as a drop in Chinese demand and the effect from fewer working days more than offset growing purchases by customers in Europe and the United States.
South Korea's trade ministry said yesterday that exports fell 0.9 per cent from a year earlier to US$47.88 billion, while imports rose 0.3 per cent to US$42.53 billion. It resulted in a trade surplus of US$5.35 billion.
Exports to China slipped 9 per cent from a year before, setting the fastest drop in nearly five years and eclipsing a stellar 32 per cent jump in sales to the European Union and a 4.5 per cent rise in shipments to the US.
Analysts and the government called for caution over the export data for last month, pointing to distortions arising from unusually long holidays falling in May in Korea and China.
"In May, China had many holidays along with ours and so that, on top of China's slowdown, steepened the fall in exports. I think it's too early to say that we will continue to see a decline in shipments to China," said Park Sang-hyun, chief economist at HI Investment & Securities.
In Korea, there were 1.5 fewer working days in May than a year earlier and this meant the average exports per working day in fact rose 6 per cent to US$2.23 billion, the second-best on record.
As the world's seventh-largest exporter, Korea is the first major industrial powerhouse to report foreign trade data each month, making its data an important guide on the latest state of the global economy.
The country has some of the world's top providers of smartphones, cars, ships and industrial equipment such as Samsung Electronics and Hyundai Motor.
The trade ministry said oil products and liquid-crystal display panels were the main products for which Chinese customers sharply reduced purchases from Korea.
It said the slowing demand from China deserved a close watch over the coming months, while adding that Korea's global exports as a whole would likely keep growing, thanks to a sustained recovery in the advanced economies.
"Given the slowing exports to China in recent months, the government plans to draw up ways to help boost shipments there, including those based on the analysis of the changing imports pattern in China," the ministry said.