Gaeseong output boosts inter-Korean trade

Korea Herald
Ko Kyoung-tae
7/30/2007

Trade between South and North Korea expanded fast this year as South Korean manufacturers picked up investment and output at the Gaeseong Industrial Park, trade data showed yesterday.

The Korea International Trade Association said the inter-Korean trade rose to a record high $720 in the first half, up nearly 30 percent from a year earlier.

Imports from the North jumped over 60 percent to $390 million, while exports slightly declined to $330 million, according to the association.

The large leap in imports from North Korea largely resulted from the fast-growing manufacturing facilities in Gaeseong.

The two Koreas have traded around $190 million of products and machineries through the industrial complex in the first six months, up almost 80 percent from a year earlier.

The KITA officials expect the rising interests in the Gaeseong complex to further push up the cross-border investment and trade in the coming years.

South Korean conglomerate Hyundai Group built the manufacturing park in the North’s border city of Gaeseong in 2004 in a bid to attract South Korean manufacturers looking for cheap labor.

More than 20 South Korean companies currently employ around 11,000 North Korean workers.

Gaeseong’s output accounts for about one-third of the total inter-Korean commercial trade, the KITA noted.

Other regular trade also soared over 65 percent to $210 million as fishery and commodity imports grew in recent months.

In contrast, aid from South to North Korea remained stagnant.

Private cross-border aid dropped 15 percent to $140 million while government aid more than doubled to $20 million, the KITA noted.

The association estimated that 2007 inter-Korean trade would surpass $1.7 billion, four times that of 2000.

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