The New Year, the Year of the Rat, has dawned. I wish you, your family and work workplace a healthy and happy new year ahead.
Last year, we struggled with the global economic downturn and the spread of trade protectionism. However, without being discouraged by all those challenges, we have maintained out position as the world’s 9th largest trading power, achieving 1 trillion dollars in trade for three consecutive years.
Exports of major items such as semiconductors, petrochemicals, and automobiles showed robust growth, while exports of new industries and services such as electric vehicles, rechargeable batteries, and bio-health continued to grow. Exports to New Southern and New North regions accounted for nearly one-quarter of the total exports, indicating great progress in market diversification. Exports of small and medium-sized companies also have expanded.
I deeply appreciate your persistent efforts and enthusiasm to make all these achievements happen.
The global economy has recently gone through a huge turning point that has overshadowed the changes in the last half century. Under the influence of the trade disputes between the United States and China, ‘My Country First’ approach and competition in the advanced technology field are becoming commonplace. With new technologies of the Fourth Industrial Revolution and the growth of emerging economies, the global value chain (GVC) paradigm that has been the growth engine of the world economy over the last half century has been shifting significantly.
As China has become a manufacturing powerhouse, the international division of labor between developed and emerging economies is weakening and the growth of world trade, especially intermediate goods, is slowing. We are also witnessing relocation of production bases as the global supply chain changes. In order to strengthen manufacturing capabilities, countries are we are vying to practice reshoring, which is to bring back the production and manufacturing of goods to their home countries from abroad.
This year, the global economy is facing more challenges. Quantitative growth in world trade is at its limit while population aging, slow growth and low consumption are becoming the new normal.
Now, Korea’s exports cannot continue its success story with the existing growth model alone. The paradigm of growth needs to shift from volume to quality and value added.
By creating substantial value added through exports, we must create a number of quality jobs and contribute to income growth and lead a virtuous cycle of economic growth. This requires extensive innovation in all areas that construct trade, including export structures, manufacturing capabilities, corporate ecosystems, policy support and regulations.
We must constantly find new trade resources with the great value added effect and growth potential. We need to foster the world's leading companies through bold investments in the fields of next-generation semiconductors, future vehicles, bio and carbon fibers. We are required to diversify our export markets and products, especially in high value-added new industries, services and consumer goods.
We are also desperate to increase innovation capabilities of companies through open innovation between large companies, midsize companies and startups. In addition, it is necessary to actively operate the corporate ecosystem of win-win cooperation so that many world-class unicorn companies can be created.
This year, the Korea International Trade Association will continue to focus on innovation and advancement of trade structure and do its best to enhance export dynamics.
As a think tank for Korea’s trade, we will prepare for future strategies for companies in a rapidly changing trade environment and promote qualitative growth of trade. We will conduct in-depth research on market diversification strategies in connection with the New Southern and New Northern policies and expand private economic cooperation to help export companies enter into overseas markets. We will provide big data-based trade information customized to the company, while supporting the growth and overseas expansion of new and promising companies armed with innovative technologies and ideas.
We will exert efforts to expand trade. We will strengthen service export research with great growth potential. We will also play a role as an open innovation and test bed through the Trade Center with a view to supporting promising startups expand into the global market. We will also work harder to increase the brand value of Korea, including the construction of Jamsil MICE infrastructure and the complex development of Yeongdong-daero.
Year 2020 is the Year of the Rat which is considered to have social and investment skills. I hope that the auspicious energy of the Rat will reach out to our traders and help them enhance their business senses, expand into good markets, and develop insights to make investment in leading technology innovation as well as good products.
The Korean economy as a whole can be revitalized if we actively innovate and invest in new technologies and product development with a long term perspective rather than focusing on short-term opportunities and performances. This year, I hope that the trade industry will challenge for the future in the lead with confidence.
Once again, I wish you great success in the future.
A Happy New Year.
New Year of 2020
Chairman of the Korea International Trade Association, Kim Young-ju