South Korea's textile and clothing imports hit an all-time high in 2014, raising worries that the country could fall into a trade deficit soon in an industry that used to be a major growth engine for its economy. South Korea’s textiles and clothing imports were up 8.4 per cent from a year earlier.

Exports inched down 0.1 per cent on-year, narrowing the industry’s surplus to a record low, about half the amount from a year earlier. South Korea's trade surplus in textiles and clothing peaked in 1998, but has been on a decline ever since. Experts worry if this trend continues, the country could soon post a deficit in the sector. Exports of textiles and clothing are shrinking as many factories, beset by high production costs, are moving to China and Vietnam. Imports are growing, mostly driven by cheaper products from China.

Consequently, the trade deficit with China in the sector has been worsening. Last year, South Korea exported $2.52 billion worth textiles and clothing to China, while its imports from the country was $6.59 billion about 45 per cent of the total imports for the sector.