Korea's Export Engine Slips into Reverse as Japan Steps on the Gas

[Raphael]

I just checked, actually there's a trade surplus for Japan, Korea, and ASEAN when talking about China, while US, EU, and them boys barely registers in terms of total trade for China.

If only I could remember which idiot said China would be done if we can't export to these countries.

Overall, good to see, Japan is our Germany, probably never going to have a positive trade balance, and that's fine. Interestingly, Germany is also our Germany.

Not sure what happened to your post, but I can't tell if those numbers are for SK in general, or SK-China trade only. Based on this site, it appears SK runs a trade surplus with China:

South Korea: Trade Statistics >> globalEDGE: Your source for Global Business Knowledge

Of the major economies, China runs a trade surplus with all, including Germany/Japan/ASEAN in aggregate, but excluding South Korea, Taiwan, Brazil, and Australia, and Saudi Arabia.

The first two exceptions are simply highly protectionist, and the last 3 are major sources of commodities/energy.

OEC: China (CHN) Profile of Exports, Imports and Trade Partners
Key Indicators on Trade & Investment---ASEAN---China Center

 

[LeveragedBuyout]

Of the major economies, China runs a trade surplus with all, including Germany/Japan/ASEAN in aggregate, but excluding South Korea, Taiwan, Brazil, and Australia, and Saudi Arabia.

The first two exceptions are simply highly protectionist, and the last 3 are major sources of commodities/energy.

OEC: China (CHN) Profile of Exports, Imports and Trade Partners
Key Indicators on Trade & Investment---ASEAN---China Center

But that further strengthens my point: if China stops trading with countries that provide it with a trade surplus (e.g. the US), that will greatly harm China's exports, and thus severely affect China's economy. Demand is not an easy thing to substitute. Yet @Genesis was largely dismissive of such a consequence, which is the opposite of what is expected ("which idiot said China would be done if we can't export to these countries").

On the other hand, China can always develop other commodity sources, or at least more easily develop such sources than destinations for export.

China is strong, China is prosperous, China is or will soon be the largest economy in the world. But let's not pretend that China is not bound to the world through trade; China can't afford to dismiss its largest trading partners without suffering serious consequences.

 

[Genesis]

That Wikipedia entry shows the US as China's largest trading partner by a significant margin. What did you mean when you said "the US barely registers in terms of total trade with China"? More importantly, why do you believe China would be unaffected if that trade disappeared (e.g. the implication of second sentence I quoted in the previous post).

List of the largest trading partners of the United States - Wikipedia, the free encyclopedia

I was looking at the second chart on this page, now that I look at it, probably should have read it more carefully, as you can see China is not on that chart.

I never said unaffected, when I made that post, I thought Japan had a bigger trade surplus that apparently doesn't exist now. However, should have elaborated on what I meant was referring to those that were saying the US led order would not be affected much if there is no trade, and countries would just be happy to jump on the boycott Chinese trade bandwagon, if there ever was one.

But let's not pretend that China is not bound to the world through trade; China can't afford to dismiss its largest trading partners without suffering serious consequences.

You can tell this is not what I meant, when there are no Chinese posters, or articles anywhere that calls for a boycott of American goods, but there is constant boycott of Chinese made goods in America.

I would be insane to think it would be ok if it happened.

 

[AndrewJin]

I think this is the first time in this week I see Korea in a thread title...Congrats!

 

[JSCh]

Not sure if on topic, but came across this,

Japan slides back into trade deficit, erasing March surplus | The Japan Times

 

[大汉奸柳传志]

I think this is the first time in this week I see Korea in a thread title...Congrats!

Korea is in every thread here..

China = West Korea
Japan = East Korea

 

[AndrewJin]

Korea is in every thread here..

China = West Korea
Japan = East Korea

LOL, China, a district of Seoul, Japan, a village of Pyongyang.

 

[Jlaw]

This is the crux of the article. There have been no productivity gains made by Japan; its simply relying on competitive currency depreciation. Once S. Korea fears that Japan is eating too much into their pie, they may be apt to do the same exchange rate trick.

All this comes at China's detriment as well. As part of our national re-balancing strategy towards domestic consumption, we have been loathe to see our currency depreciate. The RMB is the only major currency not to have lost value against the surging USD. But if exports, our traditional engine of growth, is affected too much, we may also have to resort to some form of monetary easing. Which would be a shame; I quite enjoy the current purchasing power of the RMB, lol.

No problem. Korea can print more won to depreciate it to win the upperhand again. Japs were printing like mad cows disease in the beginning of 2013 to help with export.

 

[Aepsilons]

Korea is in every thread here..

China = West Korea
Japan = East Korea

Hehehe creative imagination. Korea can be part of Western Japan

 

[大汉奸柳传志]

Hehehe creative imagination. Korea can be part of Western Japan

LOL you got a habit of flashing out the angry Koreans，I am sensing some one is registering right now and gonna kick your a$$ again

Look at how big they are，east korean！

 

[Aepsilons]

LOL you got a habit of flashing out the angry Koreans，I am sensing some one is registering right now and gonna kick your a$$ again

Look at how big they are，east korean！

View attachment 225820

HAHAHAHAHA ! Oh you mean your bestest best friend Hotmail? Cough * cough * liamtoh ?

 

[Bussard Ramjet]

Lol, but manufacturing output is up and heading to a continued path.

Ah , why can't you be happy for us?

I am very happy for Japan, and will be more if Japanese economy wasn't running on steroids, with so much monetary easing.

Raphael has a point, which was mentioned in the your own article, that Japanese currency has depreciated by as much as 30%.

Since, Abe and policy makers have shown the will to keep this going, factories are of course using this to expand production to export. The problem being that wages haven't risen anywhere close, and domestic spending in the last report declined. And mind you the decline was in real yen terms; in dollar terms the decline would be catestrophic.

Even our Central Banker Raghunath Rajan said the same, not directly pointing to Japan.

Korea losing steam is kinda expected. A major problem with South Korea is that it economic structure is way too concentration on a few sectors. While it is understandable they did that because they only have so much land and population, it still means that if they have a slump in a few sectors, the entire economy will suffer rather than having other sectors to make it up.

If you just compare South Korea and Japan, Japan is likely to come out on top over the long run because its larger population and size.

Actually no. Korea had a very good strategy, and it still is excelling in that strategy.

But that further strengthens my point: if China stops trading with countries that provide it with a trade surplus (e.g. the US), that will greatly harm China's exports, and thus severely affect China's economy. Demand is not an easy thing to substitute. Yet @Genesis was largely dismissive of such a consequence, which is the opposite of what is expected ("which idiot said China would be done if we can't export to these countries").

On the other hand, China can always develop other commodity sources, or at least more easily develop such sources than destinations for export.

China is strong, China is prosperous, China is or will soon be the largest economy in the world. But let's not pretend that China is not bound to the world through trade; China can't afford to dismiss its largest trading partners without suffering serious consequences.

I guess the point he tried to make was that some people overplay Chinese reliance on exports, especially US exports. Of course US is the single biggest sovereign market for China. Yet, breaking trade ties will lead to harm on both sides. Actually if China-US trade ties were to some day vanish, the economy will be in serious trouble.

 

[tranquilium]

Actually no. Korea had a very good strategy, and it still is excelling in that strategy.

I guess the point he tried to make was that some people overplay Chinese reliance on exports, especially US exports. Of course US is the single biggest sovereign market for China. Yet, breaking trade ties will lead to harm on both sides. Actually if China-US trade ties were to some day vanish, the economy will be in serious trouble.

I am not saying it is not a good strategy. Korea's strategy is nice with respect to its population and territory size. Ideally you would have a complete industrial base that covers all sectors, but not every nation can do it. South Korea picked one that is suitable for them. Just because the strategy is good doesn't mean it is without drawbacks.

 

[Bussard Ramjet]

Not sure if on topic, but came across this,

Japan slides back into trade deficit, erasing March surplus | The Japan Times

When I am reading reports like these, these newspapers must explain what they mean by statements like "the trade balance will remain in negative."
For people like us, that means negative territory, but I hear, that for China and Japan that means positive. So what do I take away?
@Nihonjin1051

 

[LeveragedBuyout]

I guess the point he tried to make was that some people overplay Chinese reliance on exports, especially US exports. Of course US is the single biggest sovereign market for China. Yet, breaking trade ties will lead to harm on both sides. Actually if China-US trade ties were to some day vanish, the economy will be in serious trouble.

I don't see where it's overplayed: if China's exports to the US suddenly vanished, China would enter a major depression (and probably the US would as well). Here are the points to consider:

1) Is it easier to replace a supplier (supply), or an export market (demand)?
2) Who is harmed more by the cessation of trade, the country with the trade surplus, or the country with the trade deficit?
3) Which country depends more on exports to power its economic growth?

Based on these three points, I believe that the balance of power still remains with the US (i.e. China still needs the US more than the US needs China). I say this not as a matter of pride, but rather to counter the creeping attitude of condescension and dismissiveness that I see on the part of some of our Chinese friends.

We are bound together by trade. Talk of cutting off trade, or destroying each other economically (or militarily) is futile at best, ignorant at worst. It's time to embrace the reality that we are in a symbiotic relationship, and weakness on the side of either is most unwelcome. I want to see China prosper, because that can only be good for America. I would like to remind our Chinese friends that the reverse is true as well, as much as they hate to admit it.