S. Korea''s trade dependence on china deepens

South Korea''s trade reliance on China continued to deepen in the first half of the year, outstripping the weight of its trade with the United States, as China''s fast economic growth spurred demand for Korean products, data showed Wednesday. The value of South Korea''s exports and imports with China accounted for 20.2 percent of the country''s total customs-cleared trade in the January-June period, according to data compiled by the Korea Customs Service. The weight was down from a record high of 21 percent tallied in the first half of last year, but the portion has largely remained above 20 percent since 2008, data showed, South Korea''s news agency (Yonhap) reported. Meanwhile, the weight of Korea''s exports and imports with the United States made up for a mere 9.4 percent of the total trade volume in the first six months of 2011, the smallest portion ever, according to the data. In the first half of 1990, the corresponding data with the US came in at over 28 percent, but the weight has continued to fall mainly due to Korea''s move to diversify its export markets. Exports account for about 50 percent of South Korea''s economic output. Even as the local currency has appreciated about 6 percent to the dollar since early this year, exports are largely humming along after hitting a new monthly high of $51.4 billion in July. But economic conditions for the South Korea economy are also full of headwinds as an unprecedented downgrade of a US credit rating and the eurozone debt crisis may slow the global economy, thus sapping demand for Korean products. Experts also point out that China''s runaway inflation is feared to curb domestic demand there, which would bode ill for Korean exports. South Korea''s trade ministry said in July that exports are widely expected to grow at a slower pace in the second half due to uncertainties like a US slowdown and China''s tightening stance even though the country''s annual two-way trade volume would top US$1 trillion for the first time this year.