S. Korea's trade dependence hits record high amid global economic slowdown

SEOUL, Nov. 11 (Yonhap) -- South Korea's dependence on overseas trade exceeded 90
percent of the national income last year for the first time, leaving the nation's
economy more vulnerable to fluctuations in global market conditions, data showed
Wednesday.
According to the data offered by the National Statistical Office and the finance
ministry, the nation's trade dependence ratio or the proportion of trade to gross
national income soared to a record 92.3 percent last year, up from 69.4 percent a
year earlier.
The ratio had stayed at around 50-60 percent over the past decade but surged over
90 percent for the first time last year when the global economy was hurled into
chaos in the wake of erupting financial turmoil.
A higher trade dependence means that a nation's economy is more vulnerable to ups
and downs in external market conditions. Last year's ratio for South Korea was
the 11th highest among 93 countries surveyed by the NSO and the ministry.
Comparable ratios for Japan stood at 31.6 percent, while those for India,
Australia and Britain were 37.7 percent, 39.1 percent and 41.2 percent,
respectively, suggesting that those countries have well-nurtured domestic markets
that can better shield them from a possible plunge in demand from overseas
markets during a global economic downturn.
Policymakers here are also working to reduce the country's heavy trade dependence
and expand the size of its domestic markets as part of efforts to fuel economic
growth.
In a related move, the government has been pushing to nurture its service sector,
deemed to be critical in creating new jobs and helping reduce the country's
exposure to external market fluctuations.
"The recent global economic crisis highlighted the importance of solidifying our
economic fundamentals by nurturing the domestic market though overseas trading is
still needed to fuel growth," a finance ministry official said.
kokobj@yna.co.kr
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