South Korean-made goods are losing their ground in the Chinese market, one of their largest overseas markets, amid a diplomatic row over the deployment of a US missile defense system here, industry data showed Monday.

According to the data compiled by the Korea International Trade Association, South Korean products accounted for 9.4 percent of China's import market in the first half of the year, marking the lowest since 2014, when the comparable figure was 9.7 percent.

South Korean goods' presence in the world's No. 2 economy stood at 10.4 percent and 10 percent in 2015 and 2016, respectively, the data showed.

The data showed that Korean goods in China's import market managed to log a 9.3 percent growth in the first half of the year, while other countries saw their products expand by up to 60 percent during the January-June period.

In the first half of the year, South Korea's investment in China reached $1.5 billion, a sharp decline from $2.8 billion a year earlier.

Since early this year, South Korean companies in China have faced boycotts and regulatory inspections as Beijing ratcheted up pressure on Seoul to ditch its plan to host the US Terminal High Altitude Area Defense system.

The Chinese government has appeared to be directly or indirectly involved in flexing its economic muscle while claiming in public that it is not engaged in retaliations against South Korean firms.

Observers here said that such denials are worrisome because China can skirt responsibility and allow it to maintain this stance with impunity going forward, which is bad news for local companies. (Yonhap)