Hyundai Research Institute Report on 'Assessment of Export Environment and Implications for Major Emerging Countries'
An analysis has emerged that South Korea's export conditions to major emerging countries this year are positive for Vietnam, India, and Indonesia, while there are many uncertainties for China and T?rkiye.
According to the report "Review of Export Environment to Major Emerging Countries and Implications" by Hyundai Research Institute on the 31st, amid growing expectations for the recovery of South Korea's export economy, the export recovery to emerging countries is relatively slower compared to advanced countries such as the United States and Europe.
The report was prepared targeting seven countries?China, Vietnam, India, Malaysia, Indonesia, T?rkiye, and Saudi Arabia?that account for about 69.2% of South Korea's total exports to emerging countries.
The share of emerging countries in South Korea's total exports decreased by 5.1 percentage points from 57.5% in 2020 to 52.4% in 2023. This is largely due to China's export share shrinking from 25.9% in 2020 to 19.7% last year.
China's manufacturing production index growth rate (year-on-year) has been gradually rising due to the base effect following the reopening. However, the S&P and Caixin manufacturing PMI indices, which indicate manufacturing business conditions, show conflicting trends, suggesting that China's manufacturing sector has not yet entered a full expansion phase. Additionally, the manufacturing production index growth rate (year-on-year) for major emerging countries excluding China has been slowing since the second half of 2022.
The report evaluated that India, Vietnam, and Indonesia are expected to have a positive impact on domestic export conditions. India is expected to positively influence domestic exports in terms of economic conditions and purchasing power excluding import demand; Indonesia in terms of purchasing power and import demand; and Vietnam is expected to positively affect domestic exports across all sectors.
China is also expected to aid the recovery of domestic export conditions through improved import demand, but it is anticipated that resolving uncertainties in economic conditions and purchasing power will take some time.
Malaysia and Saudi Arabia have expectations for improved purchasing power, but uncertainties in economic conditions and import demand outlooks are considered risk factors. T?rkiye is analyzed to have very weak expectations for purchasing power improvement, with relatively low expectations for economic conditions and import demand growth as well.
The report argued that, unlike the expanding expectations for export recovery centered on advanced countries recently, the recovery in emerging countries is relatively delayed, necessitating proactive responses.
First, since the export environments differ among major emerging countries, it is necessary to strengthen monitoring of changes in each country's conditions and promote exports through discovering promising export sectors and active marketing.
Furthermore, although the possibility of delayed recovery in economic conditions and purchasing power in China cannot be ruled out, it emphasized the need to pursue export strategies utilizing the Chinese government's active economic stimulus measures such as "dual circulation" and "new infrastructure" initiatives.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
