The country’s exports to China plunged by nearly 20 percent last year, marking the largest fall in 40 years. 

According to a report by an institute affiliated with the Korea International Trade Association(KITA) on Monday, South Korea’s exports to China came to 124-point-eight billion dollars in 2023, down 19-point-nine percent from the previous year.

The nation recorded a trade deficit of 18-point-one billion dollars in 2023, the first shortfall since 1992 and the largest ever deficit.

The institute attributed the deficit to changes in the South Korea-China trade structure and the supply chain structure of South Korean exporters, noting that China’s role in global trade has evolved from simply processing foreign intermediary goods to producing and exporting its own intermediary products. 

The report suggested that in order to strengthen the country’s exports to China in the long term, the nation must diversify its main export items to target China’s rapidly expanding consumer products market. It also stressed the need for South Korean businesses to actively advance into the Chinese domestic market.