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Korea Posts Surplus in Machinery Trade in 2004
January 21, 2005
Korea, which has suffered from a chronic deficit in the machinery industry in the past, is estimated to have posted a surplus in the sector last year for the first time, the Korea International Trade Association (KITA) reported on January 11. KITA said Korea registered a surplus of $567 million in machinery trade in the first 11 months, and was expected to maintain the surplus through December.
During the cited 11-month period, Korea's machinery exports stood at $15.25 billion, up 46.3 percent from a year earlier, while imports of foreign machinery products rose by 23.5 percent to $14.68 billion. The figures do not include precision machinery. Korea has been recording deficits in machinery trade since 1980, largely due to the high domestic demand for Japanese technology, but the deficit continued to decrease after peaking at $14 billion in 1995.
KITA said Korea's trade surplus in industrial machinery, including chemical and metal processing machines, ballooned to $1.06 billion between January and November last year from $485 million the year before. Korea's exports of parts for optical instruments, heavy construction equipment and textile machinery increased significantly, helping Korea get into the black in the sector.
Even though Korea continued to see deficits in basic industrial machinery, industrial and construction machine tools and machine elements and parts trade, the gaps have narrowed from previous years. "Korea is still seeing a huge deficit in machinery trade with Japan, but Korea was able to reverse the deficit trend in overall machinery trade last year because it achieved a surplus in machinery trade with countries other than Japan," said Jang Sang-shik, a senior research fellow with KITA's Trade Research Institute. He also noted, "Korea will be able to develop machinery into a flagship export industry if it succeeds in gradually reducing the huge deficit with Japan."