off-the-wire

Bank of Korea sees China-bound exports recovering from second half

Kitco Media
By Reuters
Published:
Updated:
Reuters
SEOUL, April 17 (Reuters) - South Korea's exports to China are likely to remain weaker than expected for now before recovering in the second half of this year as the benefits of the reopening of the world's no. 2 economy start to filter through, the central bank said on Monday.


The Bank of Korea (BOK) said in a report that China's economic recovery was centred on domestic demand, while manufacturing inventories remained high, delaying the beneficial effects for South Korea's exports.


The report estimated a one percentage point growth in the Chinese economy to boost South Korea's by 0.08 percentage point when the growth is led by the services sector, compared with 0.11 when led by the manufacturing sector.


China-bound exports are expected to improve gradually in the second half of this year, with non-IT products of machineries and steel products leading the recovery, the BOK said. The BOK added there were uncertainties about the global IT cycle and changes in China's industry structure, however, while citing a recovery in Chinese tourists as a near-term factor that would benefit the domestic economy. (Reporting by Jihoon Lee Editing by Shri Navaratnam)

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