Trade between Korea and China has increased exponentially over the years, with China currently accounting for over 25 percent of Korea's exports.

But it appears that Korea will soon have to prepare itself for a drastic turn of events, as China is looking to strengthen its protectionist measures on several imports, especially through anti-dumping and safeguard duties.

In fact, Korea's exports to China have been on a downward slide for 16 months straight, with each month basically setting a new low.

It is worth noting, however, that from January to August this year, all of China's trade restrictions were in the form of non-tariff barriers, such as quotas, embargoes and other sanctions.

Beginning in September, however, China began investigating potential safeguard measures, or a temporary suspension of imports, on Korean sugar products, and in October, began investigating the possibility of placing anti-dumping duties on a Korean chemical product made of polyoxymethylene, also known as acetal, that had taken the top spot in China's import market.

And as recently as Tuesday, the Chinese government said it is planning to re-open its anti-dumping investigation into a Korean polysilicon product.

That's not good news for Korean companies that have production lines in China, like Samsung SDI and LG Chemical.

For one thing, China, which currently has the biggest market for electric vehicles, is seeking to enforce higher certification standards on companies that produce lithium-ion batteries.

Companies must now have annual production capacities of eight-billion watt-hours of energy, which is 40 times more than the previous requirement of 200 million.

At the moment, only two Chinese companies meet the standard, but if the Chinese government enforces it, Korean companies could be at a serious price disadvantage.

Experts have said that China's protectionist measures reflect its intent to promote its domestic industries, and that despite ongoing speculation, it should not be seen as a response to Korea's deployment of the U.S. missile defense system THAAD.

Nov 25, 2016
Source: Arirang