South Korea - Export Britain

Export Britain

South Korea

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Capital
Seoul

Largest city
Seoul

Administrative divisions
8 provinces

Currency
South Korean won (KRW)

Area
100,210 km2

Population
50,004,441 (2012)

Calling code
+82

Official language
Korean

Latest Business Opportunities

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Ease of trading across borders

Importing a standard container of goods into South Korea requires:

3documents
7days
£432

Introduction

Over the past four decades South Korea has demonstrated incredible growth and global integration to become a high-tech industrialised economy. In 2004, South Korea joined the trillion-dollar club of world economies, and is currently the world's 12th largest economy. Following the Asian financial crisis South Korea adopted numerous economic reforms, including greater openness to foreign investment and imports. The South Korean economy's long-term challenges include a rapidly aging population, inflexible labour market, and heavy reliance on exports - which comprise half of GDP.

Economic snapshot (% annual growth rate)

201120122013-16
GDP 3.7 2.0 3.2
Export of goods and services 9.1 4.2 7.0
Import of goods and services 6.1 2.5 7.3
Inflation 4.0 2.2 2.3
Short-term interest rates (%) 3.6 2.9 3.6
Exchange rate (per £) - - -
Population 0.3 0.3 0.2
Unit labour cost -1.2 -1.1 0.3
Source: Oxford Economics

Economic outlook

Quarterly GDP growth exceeded expectations in Q2, rising by 1.1%, the largest increase in over two years. The rise was driven by a surge in spending by the new government. Export volumes increased modestly but at a faster pace than imports. While the economy is being supported by expansionary monetary and fiscal policy, as well as low inflation, it is currently being held back by subdued global trade flows, high levels of uncertainty, weak business investment and low levels of consumer spending. However, over time these headwinds will gradually ease, with growth of 2.2% expected this year.

Trade outlook

South Korea’s export-driven economy has recently been hit by sluggish demand from debt-hit Europe and its biggest trading partner China. Exports unexpectedly shrank year-on-year for two straight months in March and April.  The Chinese economic outlook despite recent improvement is weaker than six months ago, forecasting growth of just above 7% this year and next. This also implies weaker prospects for regional trade. 


SWOT analysis

Strengths
Fourth- largest economy in Asia
Export driven
Weaknesses
Ageing population
Inflexible labour markets
Opportunities
Production focused on electronics, automobiles, ships, machinery, petrochemicals and robotics
Threats
North/South relations

South Korea's trade with the UK

Sector segmentation growth

Sectors to watch:
  • Utilities
  • Iron and steel

Manufacturing

  • Aerospace,
  • Electronic components  boards 

Fastest-growing exporters into South Korea

Rank2012
1 China
2 Cambodia
3 Kuwait
4 Saudi Arabia
5 Singapore
6 Indonesia
7 Japan
8 Brazil
9 Australia
10 Malaysia

Total merchandise trade - Leading import partners

Total merchandise trade - leading import partners
Opportunities for UK businesses

South Korea’s 50 million strong domestic population offers UK businesses numerous and varied opportunities. The opportunities lie within the following sectors, financial and legal services, food and drink (whisky and other alcoholic beverages), pharmaceuticals, high-end fashion and textiles and construction.

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