Annual Exports Near $700 Billion
Gap Narrows to Just $27 Billion by October
Anticipation Builds for First-Ever Overtaking of Japan
South Korea is on the verge of achieving a historic milestone: reaching $700 billion in annual exports for the first time, while also eyeing a "golden cross" by potentially surpassing Japan, a traditional export powerhouse. Analysts say that, as of October this year, the export gap between the two countries has narrowed to the $20 billion range compared to the same period last year, putting South Korea within striking distance of overtaking Japan.
According to the Korea International Trade Association, the Japan Customs Association, and the International Monetary Fund (IMF), which compiles export figures by country worldwide, South Korea’s exports from January to October this year (in US dollar terms) totaled $579.1 billion. Japan’s exports during the same period amounted to $606.1 billion, resulting in a gap of about $27 billion. Considering that last year, South Korea posted $566.2 billion and Japan $688.6 billion in the same period-a gap of $122.4 billion-the difference has narrowed significantly this year.
In the global export rankings, South Korea currently stands at sixth place, closely trailing Japan, which is in fifth. Since Japan reports its export figures in yen, exchange rate fluctuations must be taken into account, making direct comparisons difficult. Nevertheless, the trend of a rapidly shrinking gap compared to last year is clear.
While Japan has not yet released its November export figures, South Korea’s Ministry of Trade, Industry and Energy announced its numbers on December 1. South Korea’s exports in November reached $61.04 billion, the highest ever for the month of November. If Japan’s exports for November this year are similar to last November’s $58.8 billion, it is expected that South Korea has closed the gap even further.
South Korea has consistently narrowed the export gap with Japan each year. After the gap stood at $128.8 billion in 2020, South Korea’s upward trend and Japan’s downward trend have brought the two countries closer together on the graph. In 2023, the gap shrank to $85.1 billion, marking the first time it dropped to a three-digit figure. In the first half of last year, South Korea came within $3.2 billion of Japan, raising the possibility of overtaking Japan within the year. However, factors such as instability in global markets and the declaration of emergency martial law disrupted momentum in the second half, causing South Korea to lose ground. As a result, South Korea’s total exports in 2024 were $683.9 billion, while Japan’s reached $707.5 billion, maintaining a significant gap.
This year, however, analysts suggest that the trend will differ due to the semiconductor supercycle. With expectations of surpassing Japan running high, South Korea’s export industry is working even harder for a "final spurt" at the end of the year. The gap has narrowed considerably compared to the same period last year, fueling optimism.
This year, South Korea’s leading export sectors are performing strongly, raising expectations even further. In particular, semiconductors and automobiles are driving export growth. In November alone, semiconductor exports jumped 38.6% year-on-year to $17.26 billion, breaking the previous all-time monthly record of $16.61 billion set in September after just two months. Automobile exports also rose by 13.7% in November to $6.41 billion, thanks to strong sales of internal combustion engine and hybrid vehicles. Only $4.83 billion more is needed to reach the annual record of $70.86 billion. Do Wonbin, Senior Researcher at the Korea International Trade Association, said, "Semiconductors are not highly seasonal, but since orders already placed must be fulfilled by year-end, there is a trend of increased exports at the end of the year. For this reason, there is potential for total exports to rise further in the remaining period."
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