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- 2019.4
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China’s gradual introduction of “open-door” policy in the late 1970s had the effect of expanding the country’s influence in the global market. This is especially true in the Northeast Asian region, where China is the major destination for intermediate goods from Korea and Japan, and all three countries benefit from the supply chain. However, Korea’s excessive dependence on China for exports was found to be problematic with the rise of the THAAD issue and China’s consequent economic retaliations, driving home the need for Korea to diversify its export destinations. Moreover, China’s technology level is developing at a rapid speed, replacing imported intermediate goods with domestic ones, further warranting a change in Korea’s export strategy.
Southeast Asia is one of the emerging alternative markets in the world economy. The region has been growing at a faster rate than the world average, even with the rest of the world experiencing a slow pace of growth. In addition, Southeast Asian countries such as Indonesia, Vietnam, and Thailand are a promising marketplace for Korea due to the popularity of the Korean Wave in the region. While there is a plethora of studies concerning intermediate goods trade in Korea, China, and Japan, there is a considerable lack of research on consumption goods trade, despite it also being a very important tool in achieving trade diversification.
As such, this study seeks to derive policy implications for Korea’s exports of consumption goods to the Southeast Asian market, by comparing and analyzing the current status and competitiveness of Korea against China and Japan—its main competitors—in the three Southeast Asian countries of Indonesia, Thailand, and Vietnam. In doing so, we attempt to provide suggestions for the diversification and enhancement of Korea’s exports.
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