The level of per capita income is quite high: $ 31,346 in 2018 according to IMF data. Unemployment is very low, with an approximate rate of 3.0% in August 2019, and the workforce shows a high degree of qualification and training. Services concentrate most of the employment, just over 70% of the active population, while the industry, which is very integrated in the global value chains, occupies 24% of the country's workers. Despite the low levels of unemployment, the increase in youth unemployment has become a worrying problem for the authorities in this country.
The South Korean market is characterized by the high purchasing power of its consumers, with increasingly demanding and sophisticated tastes that appreciate European products very positively. The signing of the Free Trade Agreement between the European Union and South Korea represents a great opportunity to significantly increase bilateral economic exchanges.
In terms of facilities for business and business activity, South Korea has been in the top positions of the World Bank's Doing Business 2019 ranking, in which it ranks fifth among 190 economies. In the Global Competitiveness report 2018 of the World Economic Forum, South Korea is ranked 15th out of a total of 137 countries, obtaining a very positive assessment in aspects such as macroeconomic stability, incorporation of information technologies, infrastructure, market size , financial market development and innovative capacity.
Entering the South Korean market is not easy. Access through local partners is the most advisable option. On the other hand, a common practice among companies in this country is the requirement of exclusivity in distribution.
Bilateral trade relations
The political relations of Spain with South Korea have always been cordial and economic exchanges on both sides follow an upward trend in recent years, in line with the greater presence of our companies in Asian markets. Although the economies of the two countries are very different, they have in common a similar economic size in population, GDP and per capita income.
Bilateral trade in goods and services is increasing and shows increasing diversification. This trade also has a strong intra-industrial character and is very integrated into global value chains in sectors such as the automotive, chemical or metals.
South Korea is the third destination of Spanish exports in Asia, behind China and Japan. Globally, it is the nineteenth country that receives our merchandise exports.
In 2018, bilateral trade reached 5,162 million euros, lower than 5,632.3 million euros in 2017. Spanish exports grew by 15% in 2018 compared to the previous year, exceeding 2,012 million euros compared to 1,741 million 2017. On the other hand, imports of Korean goods were reduced by slightly more than 8% in the same period (3,128 million euros in 2018 compared to 3,420 million in 2017).
The main sectors of the Spanish export to South Korea so far this year are aircraft (sale of several military tankers), pig meat, slag and ash, pharmacist, automobiles, automotive and clothing components. South Korean import to our market is led by the automotive sector and its components industry, followed by plastics, organic chemicals, steel and textiles.
The agri-food sector offers good opportunities in products such as pork, olive oil, gourmet products and quality wines. They also have potential consumer sectors with high added value, such as fashion, accessories, jewelry, cosmetics, habitat and cultural industries.
Tourism from South Korea to our country has increased significantly in recent years thanks to the recent inauguration of new air connections. The increase of visitors of this nationality opens interesting opportunities to exploit a tourist market until recently marginal.
The fact that South Korea is a world leader in industrial sectors such as shipbuilding, automotive or electronics opens a wide margin to foreign companies willing to become suppliers of machinery, intermediate goods, materials or components necessary for production in South Korean industry that this cannot be obtained in the national market.
The South Korean government's commitment to sustainability and the environment also open interesting opportunities in sectors such as renewable energy.
Bilateral investments, being increasingly important, still have a long history. Among the most prominent Spanish investments are operations in sectors such as wind energy or steel recycling. On the South Korean side, investments in port facilities and in the manufacture of lubricants are relevant.
It is also necessary to highlight the business collaboration between companies of both countries in infrastructure investment projects developed jointly in third markets.
>> Related documents
>> Links of interest