According to the report “Prospects and Enlightenments on the Export Impact of Major Industries when the RMB Depreciates” recently released by the Korea Industrial Research Institute, due to the recent continued depreciation of the RMB, export industries with high export similarities between South Korea and China will be negatively affected.
At present, countries around the world have successively lowered the value of their currencies to promote the increase in exports. China has also joined the currency war. It is expected that the exports of South Korea’s major industries will be greatly affected.
The Korea Industrial Research Institute pointed out that South Korea has just been affected by Japan’s use of the depreciation of the yen to revive the competitiveness of its products. If China also lowers the value of the renminbi to enhance competitiveness, South Korea’s exports, which have already declined sharply, will We are once again facing challenges. This is due to the depreciation of the RMB, which will improve the price competitiveness of Chinese products in the global market, resulting in a reduction in market demand for Korean products.
According to analysis, the main industries in South Korea that may be greatly affected by the depreciation of the renminbi include fiber, general machinery, oil refining, home appliances (finished products) and steel.
As for fiber, because Chinese products almost occupy Southeast Asian markets such as Vietnam, South Korea’s exports have relatively decreased.
Due to the high similarity between general machinery and Chinese products, exports of mid-level machinery and equipment will decrease.
The oil refining project decreased due to the increase in exports of cheap Chinese products, which was greatly affected by the export of Korean products.
Home appliances As the influence of Chinese products in the mid- to high-priced home appliances market increases, the demand for Korean products decreases.
In addition, due to the improvement in price competitiveness of Chinese products, the share of steel projects in the global market has increased, while the foothold of Korean steel has been relatively reduced.
The Industrial Research Institute stated that due to China and other underdeveloped countries rushing to catch up, coupled with the recent global economic downturn, excess supply, falling oil prices, and the successive depreciation of the Japanese yen and RMB, South Korea is facing a gradually deteriorating export environment. Therefore, South Korean industries It is necessary to carry out high-intensity structural reforms to strengthen price and product competitiveness in order to respond to changes in the external industrial environment, and to actively expand markets such as India and Vietnam to break away from over-reliance on exports to China. South Korea’s fiber industry will be greatly affected by the depreciation of the yuan
