Thaad missiles put a rocket up Korea-China trade

By RJ Whitehead

- Last updated on GMT

Thaad missiles put a rocket up Korea-China trade

Related tags: South korea

Rising exports of South Korean instant noodles, dried seaweed and beer to China have bucked dipping food and beverage trends following Seoul’s decision to deploy a US-backed missile defence system.

According to the Korean Ministry of Agriculture, Food and Rural Affairs, exports in the three categories have grown substantially between January and June, while the wider processed foods market has seen a sharp drop in cross-border trade since March, when it was announced that the Terminal High Altitude Area Defence (Thaad) system would be put to use on local soil.

The news that four missile launchers would be deployed last month has now brought predictions that Beijing will introduce official measures to limit imports from Korea further. China believes that the Thaad installations, which have been designed to protect against possible North Korean attack, are against its security interests.

The ensuing diplomatic row has led to a boycott by Chinese consumer groups influenced by the government, with sales of South Korean powdered milk, biscuits and abalone hit particularly hard.

In the first eight months of 2017, shipments of these have all fallen by double digits, compared to the previous year.

Yet trade in the noodles, seaweed and beer in 2017 has reached around US$150m—equivalent to 18% of Korea's processed food and farm exports over the same period, worth US$856m.

Outward shipments of dried seaweed hit US$65, up 46.2% year-on-year, while instant noodles jumped 45.7% to $56.5 million. Meanwhile, beer volumes surge by 106.% to US$29m, the ministry’s data showed.

It attributed the growth of seaweed exports to poor output in China, and cited the popularity of Korean-made ramyun​ noodles, along with diversified distribution, as a boost to sales. 

Beer exports rose as greater volumes were shipped under manufacturing arrangements involving Chinese partners.

The growth in trade has not all been in one direction, after it emerged that almost half of all kimchi served in Korean restaurants now come from China last year.

A survey by the World Institute of Kimchi showed that 47% of the kimchi found in restaurants is imported, with 90% coming from China. Of all the kimchi sold in South Korea across all channels, 14% was produced overseas.

South Koreans consumed 1.85m tonnes of kimchi last year, up 15% from 2015–amounting to 36.1kg of kimchi per person on average. Some 63% of the kimchi was made at home.

The institute has urged the government to draw up proper guidelines for imported kimchi, citing growing public anxiety over food safety.

"While kimchi manufacturers in Korea are required to meet rules to ensure food safety, most of the kimchi imported from China does not​," the institute said, referring to preservatives, artificial sweeteners and microorganisms detected in Chinese kimchi over recent years.

"There should be measures to manage the hygiene and safety of kimchi​," it added.

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