Are Supply Chains in CJKHealthy during the Pandemic?:
The Case of Automobile
Industry
January 17th 2022
DoHoon KIM, PhD.
GSIS, Sogang University
Former president, KIET

Supply Chains: AHot Issue of theWorld Economy

Recent Pictures about Supply
Chains in the World Economy

Los Angeles and Long Beach ports, FT, January
9th 2022

Main Problems in Supply Chains:
Transportation and Logistics?
• Even though the supply chain disruptions
were regarded to be mainly caused by,– US-China trade dispute– Coronavirus Pandemic• Congestion in maritime transportation andrising logistics cost (both shipping and longdistance trucking) seem to be the main
bottlenecks for the return to normalcy ofsupply chains.
– Even though these problems are also rooted inthe above-mentioned two issues.

No Logistics Problem in CJK, So,
Healthy Supply Chains?
• Fortunately trade between CJK does not seem tobe faced with a comparable level of serious
logistics problem.
– In spite of the Coronavirus Pandemic• Apparently well-functioning supply chains in CJK
area especially in major manufacturing sectors
can be found through trade data.
– The case of the automobile industry is a goodexample.

• However, CJK should be more cautious aboutsome sporadic supply chain disruptions whichhave been occurred due to political reasons.

Sustaining AutomobileIndustrial Eco-system
in CJK Area

Automobile Industrial Ecosystem in CJK before COVID-19
I introduced the well-functioning industrial eco-system for theautomobile industry in CJK during the 2020 meeting of the CJK
cooperation Dialogue, emphasizing well-developed three-way autopart trade.
Car Trade in CJK (2018, mil US$)

Source: UN, ComtradeAuto-part Trade in CJK (2018, milUS$)

Automobile Industrial Ecosystem in CJK during COVID-19
We can find that the industrial eco-system for automobile industry in
CJK continued to function in spite of the coronavirus pandemic in 2020,
even though the thickness of most arrows has been decreased.
Car Trade in CJK (2020, mil US$)

Source: UN, ComtradeAuto-part Trade in CJK (2020, milUS$)

Automobile Industrial Ecosystem in CJK during COVID-19
However, taking into account the decreasing trend of the automobile
trade of CJK countries with the world after the coronavirus pandemic,
we can say that the automobile industrial eco-system of the CJK area
was able to sustain its strength despite the pandemic.
Automobile Trade of CJK (2020, mil
US$)
Car

Automobile Trade in CJK (2018, mil
US$)

Parts

Car

Export Import Export Import

ExportImport

Parts
ExportImportJapan

80,962 10,155 27,532

6,324

Japan

99,132

12,18336,593

8,634

Korea

35,638 12,061 15,790

4,053

Korea

38,248

11,201

19,544

3,880

China

9,942 44,923 33,355 25,855

China

8,627

49,61035,13529,508Source: UN, ComtradeIndustrial Eco-system ofBatteries in CJK• When we look more in detail into the trilateral trade of batteries, which are now
regraded as the crucial part of the nextstage automobile industry.
• We can find that CJK countries havebeen interdependent each other quite
deeply for the battery industry also.
– Even though CJK countries export batteries
throughout the world, they import themmassively from each other.

CJK Export of Batteries
Battery Exporters, 2020

Others, 24.0
China, 29.4

Hungary, 3.8
Hong Kong, 5.5
Korea, 9.9USA, 5.6
Japan, 6.4

Germany, 8.1
Poland, 7.4Source: UN Comtrade

East Asian
countries
dominate theworld battery
market asexporters also.

CJK Export of Batteries
China's Battery Export, 2020

Japan's Battery Export, 2020

Korea's Battery Export, 2020

France, 2.7
USA, 14.6
Thailand, 2.8
Others,35.3

HongKong, 10.3
Germany,
7.8
Viet Nam,
7.7
Korea,
7.2

Spain, 2.5
Poland, 2.9
Netherlands, 3.0

Hong
Kong,
3.4

USA, 16.3

Others,14.7
Others,27.1

USA, 34.8

Korea, 3.9

Turkey,4.1
Germany,
4.3
Singapore,
6.5

Australia,
2.0
Mexico,2.0
China, 16.4
UK, 6.5Japan, 4.7India, 4.0

Source: UN ComtradeUK, 2.3Poland, 9.0
HongKong, 3.7Japan, 4.3 Viet Nam,
5.0China, 14.9

Germany,
13.3

CJK Import of Batteries
China's Battery Import, 2020
Indonesia,
Others, 5.2
Viet Nam,
1.8
4.6
Singapore,
5.2
Korea,
21.3
USA, 5.4

Japan's Battery Import, 2020

Korea's Battery Import, 2020
Others,Singapore,
0.8 Malaysia, 4.3
Germany,
0.8Nam,1.8
2.1 Japan, 1.8USA,
Viet 1.9

Thailand, Germany,
2.6
2.6Indonesia,
2.7Others,
6.4
OtherAsia, 3.6

Hungary,2.0

USA, 5.0

Germany,
10.4

China,
53.5

Japan, 17.7
Korea,
17.6

Malaysia,
10.7
Unknown,
17.6

Singapore,
6.0

Source: UN Comtrade

China, 84.4

Batteries in CJK• CJK countries export batteries all over the world. The
number one destination for CJK’s export is USA. So,
we can understand the US’s concern about supply
chains in batteries.
• Several European countries such as Germany, UK,
and Poland also import batteries from CJK countries.
Europe seems also to be committed to build up its
own internal supply chains of batteries.
• CJK countries, even with their strong
competitiveness in the world market, seem to beinterdependent each other (other two countries are
two major exporters for each of CJK countries).

Historical Change of CJK’s
Procurement
China's Battery Import
60.0Japan's Battery Import
70.0

90.0
80.0

60.0

50.0

Korea's Battery Import

70.0
50.0
40.0

60.0
40.0

50.0

30.0
40.0

30.0
20.0

30.0
20.0
20.0

10.0

10.0
10.0

Korea

Korea

China

Source: UN Comtrade

0.0

1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019

1992
1994
1996
1998
2000
2002
2004
20062008
2010
2012
2014
2016
2018
2020
Japan

1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019

0.00.0

Japan

China

Batteries in CJK• China’s rise in other partners’ markets isimpressive, which shows the continuous
strengthening trend of its competitiveness.
Especially Korea, once absolutely dependent on
Japan, has been rapidly changing its importdestination into China.
• Korea’s rise as exporter in this region is also
notable, as in each of both partners market
share has been rising continuously andgradually.
• Japan seems to be losing its market share inboth partners, while its export in other part of
the world maintains.

SUGGESTIONSStrengthening Tri-lateral Ties
• CJK countries which have developed astrong automobile industrial eco-system
including batteries would have mutualinterest to strengthen existing
cooperative division of labor in theissues such as technological exchanges,
material procurement, and environmentalprotection.

Less Specialization, More
Diversification• CJK countries might need to avoid the situation“all eggs in one basket”, in order to lessen too
serious shocks in their industrial eco-system, bytrying to establish supplementary supply chainsin other part of the world in addition to well
performing east Asian supply chains.
• CJK countries should try to understand concerns
raised by Americans and Europeans about theconcentration of production of batteries. It isnecessary for CJK countries to diversify theirproduction locations.

Avoiding Trade Barriers• Even though we have well-organized industrial ecosystem in the automobile industry in CJK area, wehave been sometimes faced with trade barriers
which reduce the functionality of this industrial ecosystem.
– Several automakers in CJK countries experienced
sporadic stops of car production due to thesemiconductor shortage.
– Related to this, Korea experienced a serious shortage
problem of urea-solution which is crucial for trucking
operation due to sudden stop of China’s export.

• So, CJK countries should avoid any kind of new
trade barriers in this industry.

Further Cooperation• Batteries are expected to be used more
widely in future industries such as IT andmachinery. CJK countries should enhancecooperative efforts in these battery usingindustries.
• Furthermore, as the world has to reduce its
dependence on fossil energy sources inorder to fight for climate change, CJK
countries should work together to increase
the use of batteries for this purpose as well.

Thank You