South Korea's exports hit record high in 2013 amid global recovery

South Korea's exports hit a new high last year on the back of global recovery that led to strong demand from major trading partners such as China and the United States, a government report showed Wednesday. Exports, which account for around half of the economy, increased 2.2 percent from a year earlier to 559.7 billion U.S. dollars in 2013 after declining 1.3 percent in the prior year, according to the Ministry of Trade, Industry and Energy (MOTIE). Imports inched down 0.8 percent to 515.5 billion dollars last year, sending the trade surplus to 44.2 billion dollars, higher than a 28.3 billion dollar surplus tallied in 2012. The export and surplus figures reached new highs last year, with the trading volume exceeding the 1-trillion-dollar level for three straight years. The ministry said in a press release that exports to major trading partners, including China and the United States, expanded amid signs of global recovery, adding that demand for major export items such as chips and smartphones was solid from overseas markets. Exports to China and the United States rose 8.6 percent and 6 percent, respectively, last year, offsetting a reduction in shipments to Europe and Japan. A weak Japanese yen weakened the price competitiveness of South Korean exporters, who are competing fiercely in the global market. Shipments of telecommunication devices such as smartphones surged 21.2 percent in 2013, with those of home appliances and semiconductors jumping 16.8 percent and 13.3 percent, respectively. Exports of petrochemicals and automobiles increased 5.5 percent and 3.1 percent each, and ship exports were improved amid the recovery in the global shipbuilding industry. Semiconductor became South Korea's No.1 export item due to stronger demand caused by brisk sales of mobile devices, including Samsung's Galaxy smartphones. Steel exports remained sour on the global oversupply, and display panel shipments showed lackluster picture amid lower product prices. Imports of capital goods increased last year as companies increased their capital spending to expand facilities in the machinery sector, and consumer goods imports rose due to demand for luxury foreign cars, clothes and beef. The ministry forecast that the country's exports would grow at a faster pace in 2014 compared with 2013, saying that major economies such as the United States and Europe would recover hand in hand with the continuing growth of the Chinese economy. 2014 exports were forecast to rise to 595.5 billion dollars, but trade surplus is expected to reduce to 33.5 billion dollars this year because of the expectations for faster import gain. Negative factors remained over the trade outlook. The U.S. Federal Reserve decided to taper its monthly bond purchases by 10 billion dollars to 75 billion dollars starting from this month amid the expected sluggishness in emerging economies. The weak yen trend was expected to continue, leading to lower shipments to Japan. Additionally, exports for December jumped 7.1 percent from a year earlier to 48.1 billion dollars due to demand from China and the United States. Exports to China and the United States jumped 8.4 percent and 13.2 percent respectively last month, relieving a reduction in Japan and Southeast Asian nations. The country recorded a trade surplus of 3.7 billion dollars in December, keeping its surplus trend for 23 straight months.