According to Yonhap News Agency’s report on March 3, the textile and clothing industries that have driven South Korea’s exports and economic development in the past are facing the squeeze of China’s mid- to low-price products and may turn into a deficit this year. According to statistics from the Korea International Trade Association, South Korea’s fiber and clothing exports last year were US$15.939 billion, a year-on-year decrease of 0.1%; imports hit a record high of US$14.655 billion, an increase of 8.4%, and the trade surplus hit a record low of only US$1.28 billion. Among them, South Korea’s fiber and clothing exports to China last year were US$2.515 billion and imports were US$6.593 billion. South Korea’s trade deficit reached US$4.078 billion. The main reason for this phenomenon is the rise in domestic labor costs in South Korea. Domestic garment factories in South Korea have moved to China, Vietnam and other places on a large scale. Domestic enterprises in South Korea have turned to the production of high value-added textiles such as tire cord fabrics and ultra-fine yarn cleaning cloths. Currently, they account for approximately South Korea accounts for more than 60% of its textile and apparel exports. South Korean companies should give full play to their technological leadership to cope with highly competitive Taiwanese companies and Chinese companies that are rapidly catching up.
