Total textiles and clothing exports from South Korea to China were $88.80 million in January 2021, which rose considerably in Q1 2021 due to increasing domestic and international demand owing to high vaccination rates. Most countries have already removed the strict restrictions imposed due to the pandemic.
Exports surged by 16.20 per cent to $103.19 million in March 2021, over the exports in January 2021 and showed a moderate decline of 9.91 per cent in Q2 to reach $93.28 million in June 2021 due to the repeated waves of the pandemic in the two countries, according to Fibre2Fashion’s market analysis tool TexPro.
In the beginning of 2021, China had negotiated fresh free trade agreements (FTA) and revised the existing ones to boost bilateral and multilateral trade. This helped the nation overcome the barriers of the pandemic.
China wanted to promote free and convenient trade and investment with their partners, according to Gao Feng of the Chinese ministry of commerce. This initiative would support China-Japan-South Korea FTA, free trade discussions with Gulf Cooperation Council, Israel and Norway and joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
With the implementation of China-South Korea FTA, approximately 55 per cent of the total trade tariffs between these two countries reduced to zero, according to China's General Administration of Customs (GAC). Around 90 per cent tariffs of goods and 85 per cent tariffs of trade value may eventually reduce to zero within a transition period of 20 years.
In April 2021, Korean companies faced very high logistics costs with prolonged surge in ocean freight charges. It is also expected to increase further due to unstable supply and demand for empty containers and a rise in demand due to revenge consumption, according to the Institute for International Trade.
China and Korea would be the top Asian countries to actively recover in the trade of luxury goods including luxury textiles and garments, according to Euromonitor International report. It also predicted that these two countries would achieve pre-pandemic levels by the end of 2021.
In November 2020, the Regional Comprehensive Economic Partnership (RCEP) agreement was signed by 15 Asia-Pacific nations, including China and South Korea. This is likely to help the countries grow faster with better investment in the region.
Fibre2Fashion News Desk (KD)
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