News ID: 254630
Published: 1047 GMT June 21, 2019

South Korea's current account surplus with China surges in 2018

South Korea's current account surplus with China surges in 2018

South Korea's current account surplus with China rose from a year earlier in 2018 on record exports, central bank data showed on Friday, amid concerns that this year's performance will not be good given a sharp cut in shipments to the world's No.2 economy.

The country's current account surplus with China came to $49.13 billion last year, marking a 22.5 percent leap from $40.11 billion the year before and the first on-year increase in five years, according to the data from the Bank of Korea (BoK), Yonhap reported.

Such a large increase was mainly attributed to a surge in the goods account surplus, which jumped from about $38.3 billion in 2017 to a little more than $46 billion in 2018.

The country's exports to China reached a record high of $141.5 billion last year, jumping more than 22 percent from $128.4 billion the year before.

Its service account balance with China logged a $1.29 billion surplus last year, a shift from a $920 million deficit over the cited period, as its tourism account surplus expanded to $4.67 billion from $3.43 billion.

The number of Chinese visitors to the country surged 14.9 percent on-year to 4.79 million in 2018, according to the BoK.

The report, however, comes amid a steady decline in shipments to China, the largest destination for South Korean goods.

South Korean exports to the world's second-largest economy have dipped for seven consecutive months since November, with its overall outbound shipments shrinking for six consecutive months.

Seoul's current account balance came to a $660 million deficit in April, the country's first current account deficit in 84 months.

Many believe South Korea's outbound shipments may continue to suffer a decline at least for a while due to the trade dispute between the world's two largest economies — the United States and China — which are also the two largest importers of South Korean goods.

The central bank said South Korea's current account surplus with the US dipped to a six-year low of $24.7 billion last year, with its goods account surplus shrinking to about $36 billion from $38.58 billion, the lowest level since 2012, when its surplus came to $25.56 billion.

The country's current account deficit with Japan narrowed to about $24.3 billion in 2018 from $28.74 billion the previous year.

Its current account surplus with Southeast Asian countries climbed to a record high of nearly $93.5 billion last year, up from $76.05 billion in 2017, as its exports to the countries jumped 12.3 percent on-year to a record high of $166.5 billion.

And South Korea's current account deficit with Middle Eastern countries expanded from $43.5 billion in 2017 to $62.1 billion, largely due to a 35.1 percent on-year spike in the average price of oil imports from the countries.

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