The South Korean government has put together a support package for exporters in a bid to help reverse the fortunes of the country’s traders. Shipments are predicted to drop 1.5 percent in 2015 thanks to stiff competition from Chinese manufacturers and a weak Yen, which is giving Japanese rivals the edge in negotiations.
The package will help businesses open channels to sell more consumer products in China, offer certificates of authenticity for ‘Made in Korea’ products, and grant financial aid to exporters hit by currency fluctuations. The new measures build on earlier efforts, unveiled in April, to provide trade insurance, marketing assistance and help for small firms looking to team up with Chinese e-commerce businesses.
“We’re in a situation where companies in developed countries are gaining price competitiveness because of cheaper currencies while Chinese firms have caught up with our technologies,” said Park Il Jun, Assistant Minister for Industrial Policy at the Ministry of Trade in an interview with Bloomberg Business. “China’s gone from being a factory for the world to also being a market, and this has implications for South Korean exporters.”
According to the Korea Trade-Investment Promotion Agency (Kotra), consumer products accounted for just 4 percent of sales to China in 2014, but the K-Beauty boom, which saw cosmetics sales to China jump 94 percent last year to reach a value of US$494 million, is evidence of the potential for consumer products that get it right.