South Korea’s exports are forecast to rise by 3 percent in 2020 to exceed $550 billion, led by key industries including chips, automobiles and biomedicines, according to a state-run trade agency on Wednesday.

This year’s exports are expected to total $540 billion, down 10.7 percent from last year, the Korea Trade Investment Promotion Agency said. This is a bit lower than the Korea International Trade Association’s prediction of $543 billion, which represented a 10.2 percent on-year dip. Korea’s exports declined for 12 consecutive months from December last year to November this year.

KOTRA said next year’s export growth would be fueled by the nation’s key industries, such as chips, shipbuilding and automobiles, as well as by new growth items including rechargeable batteries, biomedicines and cosmetics. 

The chip industry, which plays a key role in the nation’s exports, is expected to recover due to rising demand for DRAM thanks to the expansion of data centers in the global market and the commercialization of 5G networks, the agency said. In North America, the commercialization of 5G networks was completed in 20 cities. In China, the government plans to invest around $257 billion in commercial 5G network services by 2030.

Additionally, two-thirds of the four major biosimilars are produced by Korean firms, with the global biosimilar market growing around 30 percent annually. New cars from Hyundai Motor and Kia Motors are seeing higher sales figures in North America and China.

Exports of general machinery, ships and semiconductors are expected to increase due to the expansion of infrastructure investment in emerging countries such as China and India as well as liquefied natural gas development in areas such as the Middle East, Europe and Russia, the agency said.

Exports to most regions are expected to rise, KOTRA said, including North America, China and emerging markets but excluding Japan.

Export growth is likely to recover slightly in China and Southeast Asia with increases of 2.1 percent and 3.5 percent, respectively, year-on-year. In Europe and North America, the corresponding figures are 5.7 percent and 4.2 percent. In the emerging markets of India and Africa, the economic recovery is expected to drive up exports by 8.1 percent and 6.4 percent, respectively.

KOTRA proposed a business strategy in 2020 to diversify the nation’s export structure and advance its support system to encourage small and medium-sized enterprises to enter overseas markets and thus create global jobs.

The agency aims to expand e-commerce export items from consumer goods to materials, parts and equipment, and to strengthen digital service trade support. Also, in response to Japan’s recent export control measures, it will initiate projects to foster exporters that specialize in materials, parts and equipment.

“Since the beginning of this year, we have tried to recover export vitality through the early execution of overseas marketing business and the additional budget of $14 million to overcome the export crisis,” said a KOTRA spokesperson.

“Still, it was not enough to reverse the overall decline in exports. As the top priority in 2020, we will do our best to boost exports.” 

By Shin Ji-hye (shinjh@heraldcorp.com)