Tourism from China

[Anchor Lead]

South Korea recorded the largest service trade deficit yet in the first half of the year as the number of Chinese tourists to Korea has taken a nosedive since Beijing began its retaliation against Seoul for its deployment of the U.S. missile defense system THAAD. Here’s more.

[Pkg]

Incheon Airport is packed with outbound travelers during the summer vacation season. However, the number of foreign tourists coming into Korea continues to plummet. In the month of June, the number of people who traveled overseas from Korea surged 18 percent year-on-year, whereas the number of tourists visiting Korea fell by 36 percent. The number of Chinese tourists, who accounted for half of all foreign visitors in Korea, plunged 66 percent because of the conflict over the THAAD U.S. missile defense system. As a result, Korea recorded the largest travel account deficit in June since the MERS outbreak in July 2015. The struggling transportation sector also contributed to the largest ever service trade deficit in the first half of the year.

[Soundbite] Chung Kyu-il (Bank of Korea) : "The travel deficit has expanded as the number of Chinese tourists has plunged, while overseas travel has grown. The struggling transportation sector also contributed to the deficit."

The goods and services account surplus, which represents the difference between exports and imports, recorded 58.3 billion dollars, down 6.6 percent from the first half of last year. The surplus decrease stems from rising imports due to higher energy prices despite the growing exports of semiconductors and ships. Korea's current account surplus, which includes goods and services, stood at 36.3 billion dollars in the first half of 2017, down 30 percent year-on-year.