Economic Concerns

[Anchor Lead]

The U.S. is pressing global firms to make larger investments there, while Chinese products pour into the Korean market. Under these conditions, the Korean economy appears to be pressed on all sides. Here’s more.

[Pkg]

This car affordably priced at around 17-thousand dollars... is the first Chinese sport utility vehicle introduced in Korea. The carmaker has ambitious aims to sell 3,000 units of the model this year.

[Soundbite] Lee Kang-soo(President, China-Korea Motor) : "A vehicle with high-end options marketed at this price would be astounding. It's not a "China discount" but a "China advantage"."

Following smartphones and now automobiles, China's advancement into Korea's key markets has begun in full swing. Exports to China have posted minus growth for the second year. And though imports from China have also fallen, the amount of decrease in exports and imports sharply varies. The situation with the United States is even more troubling with the incoming Trump administration. With a 2.5-billion-dollar investment by Hyundai Motor and plant construction by Samsung and LG Electronics under review in the United States...Korean firms are pouring large scale investment deals into America. Another variable? The deteriorating relations between the United States and China. Korea's economy is highly dependent on the two markets. So if a trade conflict between the two powers materializes, Korea could suffer a blow.

[Soundbite] Prof. Choi Byung-il(Ewha Womans University) : "The U.S. and China are interconnected in so many ways it's difficult to deal a fatal blow at each other. Then the next easy mark would be Korea."

Emerging markets are also expanding import regulations on Korean products. The government is expected to lay out a new roadmap on trade to reflect these changes concerning key trading partners.