Issue Korean vulnerability: External economic dependence

Summary

KDI identifies external dependence as a structural weakness of the Korean economy. Exports equal around 40% of GDP, reflecting a growth model built on manufactured exports. The share is lower than Germany's 47% or the Netherlands' 90% but far above the United States at 11% and Japan at 18%. More important is composition: concentration in a few products such as semiconductors, cars, petrochemicals and displays means that demand shocks or geopolitical controls in one industry spread quickly across the whole economy. This is why the GDP losses estimated in IMF fragmentation scenarios would weigh more heavily on Korea, since deglobalisation costs small open export economies disproportionately.