70% of South Korean manufacturing firms fear fallout from China dumping stockpiled products

Seven out of 10 manufacturing businesses in South Korea said they have been affected by or expect negative impacts from China’s dumping of its stockpiled products, a survey showed on Tuesday, warning that this trend may persist for the long term.

According to the survey by the Korean Chamber of Commerce and Industry (KCCI), 27.6 per cent of 2,228 manufacturing companies in Korea said they are affected by China’s low-price exports. Among the respondents, 42.1 per cent said they have yet to experience negative impacts from such practices but expect to in the future.

The KCCI highlighted that China’s increasing product stockpiles are driving the country’s companies toward aggressive low-price strategies. It noted that this trend may persist for an extended period if China’s inventories continue to grow amid the country’s sluggish economic recovery.

According to the National Bureau of Statistics of China, the inventory ratio of finished goods in China was 1.68 per cent in November 2023 as companies began exporting the products accumulated during the Covid-19 pandemic at reduced prices. However, the ratio rose quickly to 4.67 per cent in June this year, as China’s economic slowdown protracts.

Among Korean industries, battery-related companies complained of hardships the most, as Chinese firms’ low-price strategies are coupled with the global slowdown in electric vehicle demand.

In the survey, 61.5 per cent of companies doing business related to secondary batteries said they were already affected by Chinese firms’ dumping and 23.1 per cent cast worries over future impacts.

Along with the battery industry, 46.4 per cent of textile and apparel businesses said they were affected, followed by cosmetics with 40.6 per cent and steelmaking