Korea ranks first among South Korea, US and Japan in dependence on China for key items such as semiconductors

Source FKI ‘Status and Tasks of Import Dependence on Korea, the US, and Japan’

It was found that Korea’s dependence on imports from China for parts, materials and intermediate goods was higher than that of the United States and Japan. In particular, since the U.S.-China trade war in 2018, dependence on imports from China has gradually intensified, and the dependence on major items such as semiconductors and batteries was the highest among the three countries.

According to the ‘Status and Tasks of Import Dependence of Korea, the U.S., and Japan from China’, which was surveyed by the Federation of Korean Industries on the 12th based on statistics from the Korea International Trade Association, the International Monetary Fund (IMF), and the World Bank (WB), parts and materials as of 2020 Korea’s dependence on imports from China was 29.3% from Korea, 28.9% from Japan, and 12.9% from the United States.

In the case of imports of intermediate goods (as of 2019), Korea (27.3%), Japan (19.8%), and the United States (8.1%) had the highest dependence on China in that order. The FKI explained that Korea, Japan, and China are highly dependent on imports from China for intermediate goods and parts and materials because they are connected by economic blocks through intermediate goods trade.

Source: FKI 'Status and tasks of import dependence from Korea, the US, and Japan

Source: FKI ‘Status and tasks of import dependence from Korea, the US, and Japan

Korea’s dependence on China for imports is intensifying with the US-China trade conflict as a starting point. In a situation where the US-China conflict is likely to intensify ahead of the US midterm elections scheduled for this year and the National Congress of the Chinese Communist Party, some point out that it is necessary to reduce excessive dependence on China for imports of key industries.

Based on all items, Korea’s dependence on China for imports from January to August this year stood at 24.3%, up 3.8 percentage points from 20.5% in 2017, just before the US-China trade war broke out. On the other hand, in Japan, the increase was only 0.1 percentage points, and in the United States, it decreased by 4.2 percentage points.

In particular, Korea has three countries (as of 2020) that depend on imports from China for semiconductors, batteries, core metals/materials (rare earths), and antibiotics (drugs/drug raw materials), which are the four key items of the Biden administration’s supply chain reconstruction. All were number one.

Semiconductors imported from China by South Korea in 2020 amounted to US$17.93 billion, accounting for 39.5% of total semiconductor imports. This is 6.3 times that of the US (6.3%) and 2.2 times that of Japan (18.3%).

Paradoxically, Korea, a semiconductor powerhouse, showed the highest dependence on imports of semiconductors from China. Domestic companies such as Samsung Electronics and SK Hynix produced a significant amount of semiconductors from their local factories in China up to the front-end (wafer processing) stage and then imported them to Korea for post-processing ( The FKI explained that it is because they are processing wafers (cutting and packaging).

Source: FKI 'Status and tasks of import dependence from Korea, the US, and Japan

Source: FKI ‘Status and tasks of import dependence from Korea, the US, and Japan

The dependence on imports from Korea for batteries (lithium ion storage batteries), which is rapidly growing in demand due to the expansion of electric vehicles, etc., reached 93.3%, much higher than that of Japan (66.1%) and the United States (43.4%). The FKI analyzed that this was the result of responding to the shortage in domestic electric vehicle sales with imports from Chinese factories amid an increase in domestic electric vehicle sales.

Korea’s dependence on imports of antibiotics (drugs and pharmaceutical raw materials) from China was 52.7%, exceeding that of Japan (34.2%) and the United States (31.2%). 42.9%) and Japan (41.1%).

Kim Bong-man, head of the FKI International Cooperation Office, said, “Major countries such as the United States and the European Union (EU) are working hard to expand production facilities in their own countries for key items. We need to make policy and institutional efforts to make it happen,” he said.

Reference-www.khan.co.kr

Related Post

Leave a Reply

Your email address will not be published. Required fields are marked *