South Korea Aims To Minimize Economic Damage From Coronavirus
STEVE INSKEEP, HOST:
The coronavirus is costing China's neighbors a lot of money. NPR's Anthony Kuhn reports from Seoul, South Korea.
(SOUNDBITE OF MUSIC)
UNIDENTIFIED SINGER: (Singing in Korean).
ANTHONY KUHN, BYLINE: Korean pop music plays in a shop in central Seoul as tourists try on brightly colored traditional robes called hanbok. After renting the robes, they'll snap pictures of each other as they roam around Gyeongbokgung, a former royal palace. But the shop's manager, Noh Seung Won, says the coronavirus epidemic has cut his sales in half.
NOH SEUNG WON: (Speaking Korean).
KUHN: "Chinese now account for a lot of the tourists coming to South Korea," he says, "and they usually account for about 80% of our sales." Besides tourism, airlines, automakers and other South Korean companies are reporting virus-related losses. Carmaker Hyundai Motor announced this week it's suspending production at factories in South Korea because the supply of parts from China was interrupted. At home, Korean consumers, including shop manager Noh, say the virus has cut their spending.
NOH: (Speaking Korean).
KUHN: "I try to go out as little as possible, just in case," he confides. "My parents and grandparents do the same, as they're afraid of contracting the virus, too."
LEE SANG-HO: (Through interpreter) The domestic economy will inevitably be affected. If you visit restaurants, cinemas and bars these days, they're basically empty.
KUHN: That's Lee Sang-ho, a researcher at the Korea Economic Research Institute in Seoul. He says that epidemics such as the 2003 SARS outbreak have become a recurring disruption, which companies just have to factor in.
LEE: (Through interpreter) I think this will be remembered as a time when South Korea started to decrease its reliance on China, as companies diversify their export destinations.
KUHN: Kang Cheol-gu, a Japanese studies expert at Pai Chai University in Daejeon city, points out that both South Korea and Japan export a lot of intermediate goods - things like computer chips and machine parts - which are shipped to China for assembly.
KANG CHEOL-GU: (Through interpreter) When an external factor like this outbreak comes up, it means that our exports take a severe hit. So we have to increase the amount of consumer goods in our exports.
KUHN: Kang admits, though, this is not a change which can happen overnight.
Anthony Kuhn, NPR News, Seoul. Transcript provided by NPR, Copyright NPR.