Illustration: Xia Qing/GT

In 2024, China remained South Korea's largest export destination, with South Korea's exports to China growing by 6.6 percent year-on-year, data from the Korea International Trade Association (KITA) showed, as reported by the Yonhap News Agency. This data attracted public attention, with some of the focus placed on the comparison between South Korea's trade with China and that with the US. The Yonhap News Agency reported Monday that the gap between South Korea's exports to the two countries shrank to just $5.2 billion, the smallest in 21 years. 

China is South Korea's largest export destination, followed by the US, according to reports. In the current complex international geopolitical and economic landscape, South Korea faces an issue of managing its dependence on both the Chinese and American markets. The dynamics driving exports to these two markets are distinct, with differing structures of trade and growth factors. Thus, comparing the absolute value of exports to each market may offer limited insight. However, one fact remains clear: South Korea's dependence on both the Chinese and American markets remains significant and enduring.

Although the gap between South Korea's exports to China and those to the US is narrowing, the economic ties between China and South Korea are undeniably crucial, forming a relationship that cannot be easily substituted by any of South Korea's other bilateral partnerships. 

First, South Korea's export-oriented economy underscores the significance of its trade with China. According to Yonhap, the value of South Korea's exports to China reached $133.03 billion in 2024. Given South Korea's export-oriented economy, this massive trade flow underscores the positive role of exports in driving South Korea's economic growth. A sustained increase in exports to China is not only beneficial but important for fostering continued economic expansion in South Korea.

Second, in sectors like semiconductors, which form the backbone of South Korea's industrial landscape, the economic interdependence between South Korea and China is particularly pronounced. The two countries have developed a strong complementarity in key industries, with their supply chains closely intertwined. Semiconductor exports, for instance, represent an important component of South Korea's economy.  The dependence on China as a primary market for South Korea's semiconductor industry underscores the indispensable role China plays in supporting South Korea's industrial capabilities and economic growth.

The trade relationship between China and South Korea is deeply rooted in a long-standing economic framework and mutual complementarity, making it resilient to short-term fluctuations in bilateral trade. This, however, does not diminish the significance of South Korea's trade relations with other partners in driving its economic growth. In an era of globalization, strengthening economic ties with China does not stand in opposition to South Korea's efforts to bolster other trade relationships; on the contrary, these efforts are mutually reinforcing.

South Korea is an integral part of Asia's manufacturing supply chain. If the US, as the ultimate consumer market, provides South Korean manufacturers with greater import opportunities in 2025, it would not only benefit South Korea's economy but also the broader Asian manufacturing ecosystem, including China. These Asian countries export some intermediate goods - such as raw materials and components - to South Korea, where they are further processed and ultimately exported to the US, highlighting the interdependent nature of the region's economic networks.

As Asia's manufacturing supply chains continue to evolve, external interference driven by the narrow geopolitical interests of certain nations could reverberate across the region's industrial networks, potentially generating negative consequences. According to a September 2024 report from the Korea Herald, the US is ramping up pressure on South Korea to align with its export control measures against China, urging advanced chips like high bandwidth memory versions be provided only to allies. If South Korea's exports of advanced chips to China are affected by such restrictions by the US, it could place some strain on South Korea's exports to China. How South Korea navigates these pressures - and whether it can maintain or even accelerate its export growth to China beyond 2024 - will be a test of South Korea's wisdom to safeguard its own economic interests.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn