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(Yonhap Interview) S. Korea's exports of electronics, parts to China not affected by THAAD row: KTL head

2017/03/20 17:17

By Kim Boram

SEJONG, March 20 (Yonhap) -- South Korea's exports of electronics goods and parts to China are not affected by escalating trade tensions between the two neighboring countries stemming from the planned deployment of the U.S.-led missile defense system, the head of a public testing agency said Monday.

Tensions are building between South Korea and China as Seoul has sped up plans to station the Terminal High Altitude Area Defense (THAAD) system on its soil.

China has taken a series of provocative actions against various South Korean cultural products and businesses for months. Recently, Beijing told its major travel agencies to stop selling tour packages heading to South Korea, while reports showed that some shops in China run by retail giant Lotte were put under business suspension by local authorities.

Many are worried that such measures will drag down South Korea's exports to China to a large extent, citing they accounted for 25 percent of the country's entire outbound shipments last year worth US$494.2 billion.

President of the Korea Testing Laboratory Lee Won-bok (Courtesy of the Korea Testing Laboratory) (Yonhap) President of the Korea Testing Laboratory Lee Won-bok (Courtesy of the Korea Testing Laboratory) (Yonhap)

But the head of the Korea Testing Laboratory (KTL) said there is no clear evidence that the Chinese government has banned imports of Korean products related to the manufacturing sector.

"The technology sector is not affected by political issues," KTL President Lee Won-bok said in an interview with Yonhap News Agency. "It is because China needs our goods, as we need theirs."

   China depends highly on Korean-made semiconductors, electronic components and machinery, as more than 90 percent of South Korea's exports to China are intermediate goods in 2016.

Before selling and exporting a product, a company needs to attach an international certification through a KTL-endorsed examination body.

To meet rising demand for certification services from South Korean firms who do business in China, the KTL, a testing and certification body on electronics goods and parts, established two testing labs in the Chinese cities of Shenzhen and Shanghai in 2010.

They are also frequented by Chinese companies who want to make inroads into South Korea.

"China never reduces imports of products that can affect their own industry," said Lee. "Chinese companies also export their goods to Korea, and vice versa. These sectors are intact."

   According to government data, exports of South Korean semiconductors shot up 75 percent on-year to $4.3 billion in February, while China imported some $7.4 billion worth of South Korean information technology products last month, up 34 percent from a year earlier.

The KTL president said the agency's Chinese offices have been getting busier in recent years amid rising bilateral trade between the two neighboring countries.

They handled 2,306 certification cases in China in 2016, up from 2,297 cases tallied in 2015.

During the fourth quarter of last year, in particular, when the Chinese government started to intensify its pressure on Korean goods, the number of certification cases showed no clear signs of decline. It was 262 in October, 149 in November and 257 in December, hovering around the monthly average of 190.

"Our work is not affected by the THAAD issues," said Lee, whose three-year term will end in October. "We are expanding our business worldwide, setting up branches in the United States and the United Arab Emirates this year."