South Korea records its first trade deficit with China in 31 years

Nikkei Asia ^

[FarCenter]

TOKYO -- South Korea recorded a trade deficit of $18 billion with China in 2023, marking its first such bilateral shortfall with the country in 31 years, according to preliminary trade data released on Monday.

South Korean exports to China fell to $124.8 billion, down 20% from $155.7 billion in 2022, while imports from the neighboring country came to $142.8 billion, dipping 8% from $154.5 billion.

The larger drop in exports sent South Korea's trade with the world's second-largest economy into the red from a surplus of $1.2 billion the year before.

In contrast, South Korea's annual exports to the U.S. increased 5% in 2023. Monthly shipments to the world's largest economy in the month of December, meanwhile, exceeded those to China for the first time in 20 years on the back of solid sales of cars, auto parts, and automotive batteries.

[Gay State Conservative]

As China gets stronger,militarily,and richer South Korea’s future looks more and more bleak. I wouldn’t bet a nickel that the ROK will still be a prosperous,stable and independent country ten years from now.

[SPDSHDW]

They can, but they’d need a solid regional defense pact that has zero U.S involvement, and a Japan that ignores the WW2 peace treaty requiring “defensive forces” only.

[AdmSmith]

The reduction in the SK trade with China is mainly due to the slowdown of the Chinese economy:

Xi Jinping has admitted people are struggling to find jobs and “meet basic needs” in China as fresh data pointed to a continued slowdown at factories and in the housing market.

The official purchasing managers index (PMI) for manufacturing declined to 49 in December, down from 49.4 in November, to reach its lowest level since June, according to the National Bureau of Statistics.

A fall in new home sales also accelerated in December. The value of new homes sold by the country's hundred biggest property companies fell by almost 35pc from a year earlier to 451.3bn yuan (£50bn).

Youth unemployment in China rocketed to a record 21.3pc in June 2023. Beijing stopped publishing data on the youth jobless rate after the record was reached.

https://finance.yahoo.com/news/china-downturn-leaves-people-struggling-185917127.html

Contrary to popular belief, the Chinese economy will shrink this year. This will have a major impact as China will increase its export subsidies, which will be met with anti-dumping duties. The Chinese hope that increased domestic consumption will help boost the economy, but call a random Chinese and you will be told that if they receive any kind of government support, they will save, not consume. It's already showing up in the deflation numbers.

We need to look at alternative supply chains as soon as possible because when the Chinese slowdown starts, it will have major consequences.

[bert]

China is presently in turmoil. All the numbers coming out of China are just bogus. There is no accurate measurement of the present Chinese economy. The entities that do the data collection are broke

All over the country there is major cessation of manufacturing as companies have closed their doors leaving workers not only un employed but unpaid. The total unemployment is s great is can’t be measured.

Xi is transitioning from a semicapitalist economy to a completely CCP managed economy. The existing economy presently has to be destroyed before his vision can replace what was.

[dfwgator]

China’s version of “Build Back Better”.

[AdmSmith]

Yes, this is the case.

[Vaduz]

Xi just bought another country.

[Yo-Yo]

I would speculate that the reason for the deficit is because of the prohibition of sending computer chips and related manufacturing equipment from South Korea to China, that the Biden Administration just waived.

[FarCenter]

China is shifting to produce more capital goods and goods farther up the supply chain. These are the industrial inputs that typically come from South Korea, Japan and Taiwan.

It is also exporting more of these as final assembly moves to South/Southeast Asia and Mexico in order to avoid tariffs and embargos on Chinese manufactures.

[SuperLuminal]

The chicom’s economic malaise has been largely ignored for the past year...

In addition to disastrous economic conditions, the disastrous floods have had a crippling effect on both life and the economy...

In addition, in some respects, Vietnam has become a huge economic success at the expense of the chicom economy...

[AdmSmith]

Will the real estate market lead to China's collapse?

Zhongzhi Enterprise Group: Chinese shadow bank files for bankruptcy

The struggling group reportedly told investors in a letter in November that its liabilities - up to $64bn (£50.6bn) - had outstripped its assets, now estimated at about $38bn. ZEG is a major player in China's shadow banking industry, a term for a system of lenders, brokers and other credit intermediaries who fall outside the realm of traditional regulated banking.

Shadow banking, which is unregulated, is not subject to the same kinds of risk, liquidity and capital restrictions as traditional banks.

China's shadow banking industry is valued at around $3tn. It often provides a financial lifeline to the country's property sector. The once-booming industry has been hit by a severe credit crunch, with some of the biggest firms now on the brink of financial collapse.

At its peak, ZEG’s asset management arm reportedly handled more than a trillion yuan ($139bn; £110bn).

https://www.bbc.com/news/business-67890633

Meanhwile
Xi used Mao to threat a new Cultural Revolution if the second generation of princelings continues to oppose him.

On December 26, 2023, the 130th anniversary of Mao Zedong's birthday, Xi Jinping delivered a speech praising Mao and allowed Mao leftists to hold a so-called commemorative rally in Shaoshan, Hunan, Mao's hometown. His purpose was actually to warn those second-generation Reds who opposed him, to use Mao to threaten them, and to remind them of the pressure and persecution they had suffered during the Cultural Revolution.

On January 3, Yuan Hongbing published a commentary on “How the CCP’s Severe Political Crisis Affects the Situation in Taiwan” on the front page of the Taiwanese media “Liberty Times”. He stated in the article that people of conscience within the CCP system revealed to him that Xi Jinping is facing the most severe political crisis since he took office. The second-generation red group, with Liu Yuan , the son of former Chinese Communist Party president Liu Shaoqi, as its core, has formed a political consensus. They are planning to overthrow Xi Jinping and establish a new political party.

The second generation of Reds who formed the above consensus include Liu Yuan, Deng Xiaoping's son Deng Pufang, Hu Yaobang's son Hu Deping, Chen Yun’s son Chen Yuan, Ma Wenrui’s daughter Ma Xiaoli, and Luo Ruiqing’s daughter Luo Diandian. In addition, the children of veterans of the CCP military, including Ye Jianying, He Long, Nie Rongzhen, Xu Xiangqian, Su Yu, Xu Haidong, and Wang Zhen, are also co-signers of the consensus. In addition, the children of CCP veteran Bo Yibo also participated in the petition, except for Bo Xilai who was unable to sign because he was still in detention.

In addition, a group of military generals who are considered confidants by Xi Jinping also participated in the petition. Xi Jinping’s purges of the Rocket Force and former Defense Minister Ri Sang-bok are proof of this.

https://www.epochtimes.com/gb/24/1/6/n14152241.htm

It is a very diverse group from the extreme left with Bo Xilai to more moderate and sensible people. If they have written a joint work, a lot has happened.

We are living in interesting times...

[bert]

China has fallen on it’s ass.

Consumers are not buying anything and there is absolutely no demand for stuff from South Korea or any where else.

[AdmSmith]

Here are the statements:

First, in the ten years since he came to power, Xi has betrayed Deng Xiaoping's line of reform and opening up and regressed to the line of the Cultural Revolution. The most serious thing is that Xi is promoting a wartime system and preparing to launch a war in the Taiwan Strait.

Second, Xi has destroyed the CCP’s democratic centralism, the economy and people's livelihood have deteriorated, and social crises are about to break out. He has engaged in wolf warrior diplomacy with other countries, and China has become a public enemy in the system of developed countries.

Third, deprive Xi of the power to control China's national destiny, transform the CCP into a social democratic party, follow the path of democratic socialism, abandon the national policy of threatening Taiwan with force, and improve relations with developed countries.

In general, Yuan Hongbing said, “Xi Jinping’s perverse behavior and return to the Cultural Revolution have caused comprehensive economic, political, social and diplomatic difficulties throughout China. Therefore, the second generation of Reds believe that Xi Jinping’s personal dictatorship should be changed, and they even proposed Come out to reform the Communist Party using social democratic methods.”

https://www.epochtimes.com/gb/24/1/8/n14153914.htm

Do you have some popcorn?

[AdmSmith]

Liu Yuan (left), son of Liu Shaoqi

Liu Yuan (Chinese: 刘源; born 22 February 1951) is a retired general of the Chinese People's Liberation Army and a former politician. He served as the last political commissar of the PLA General Logistics Department and prior to that, political commissar of the PLA Academy of Military Science. Before his military career, he served as vice mayor of Zhengzhou and vice governor of Henan. He is the son of Liu Shaoqi, former president of China.

https://en.wikipedia.org/wiki/Liu_Yuan_(PRC_general)

He was earlier very close to Xi !