Korean Media: China’s Comprehensive Rise, Eroding South Korea’s Traditional Competitive Advantages!
On October 31, South Korea’s Daily News published an article stating that, leveraging its vast domestic market, Chinese enterprises have expanded production capacity and enhanced technological capabilities beyond mere price competitiveness. Their influence has now extended into sectors where South Korea had long maintained a competitive edge—such as electric vehicles (EVs), batteries, shipbuilding, and semiconductors. This shift is exerting mounting pressure on South Korea’s overall manufacturing profitability and export competitiveness.
Last year, China accounted for approximately 75% of global EV production, reaching 16 million units. Chinese EV exports surpassed 2.5 million units, doubling compared to the previous year, with shipments to Southeast Asia increasing by 130%.
Chinese automakers are no longer relying solely on low-cost strategies. Instead, they are strengthening vertical integration by incorporating battery systems, automotive semiconductors, and software into their operations. At the same time, they are expanding local production facilities across Europe, Southeast Asia, and Latin America to circumvent tariffs and trade barriers. In response, domestic automakers such as Hyundai and Kia are striving to preserve profit margins and market share through flexible production strategies that combine hybrid and electric vehicle models, while also increasing the availability of locally adapted vehicle variants.
The reach of Chinese firms is even more pronounced in the battery market. From January to July this year, seven Chinese companies collectively held a 72.8% share of the global EV battery market. Excluding the domestic Chinese market, the combined market share of CATL and BYD alone reached 44.6%. Meanwhile, South Korea’s three major battery manufacturers—LG Energy Solution, SK On, and Samsung SDI—have experienced declining battery usage volumes amid intensifying competition.
Chinese firms are broadening their supply chains beyond EVs to include energy storage systems, capitalizing on the cost advantages of their lithium iron phosphate (LFP) batteries. In contrast, South Korean companies are actively reinforcing their technological edge in nickel-cobalt-manganese (NCM) batteries—particularly in areas such as energy density and safety—while simultaneously diversifying product lines to include LFP batteries, energy storage systems, and next-generation battery technologies. Furthermore, reducing dependency on specific markets through diversification of demand sources and increased localization of production capacity has become an emerging strategic trend.
China is also advancing rapidly in shipbuilding. While South Korea retains a strong position in high-value vessels such as LNG carriers, China’s growth trajectory is striking. In the first half of this year, China captured around 72% of global new ship orders, compared to South Korea’s stable share of approximately 20%. With extensive experience and established supply chains in general cargo ships, China is extending its competitive footprint into high-value segments including LNG carriers and environmentally compliant vessels.
South Korea still holds a relatively clear technological advantage in semiconductors. Although Samsung Electronics and SK Hynix have demonstrated competitiveness in advanced memory technologies—including HBM—China is accelerating its self-reliance in generic semiconductors and equipment development.
If Chinese-made equipment were to fully integrate into the global supply chains of memory manufacturers, South Korea’s semiconductor materials, components, and equipment industries would inevitably face significant challenges. This is because China’s initial strategy—starting with finished products—may eventually expand into upstream domains such as raw materials, components, and equipment. Analysts note that South Korea’s semiconductor industry must simultaneously strengthen the competitiveness of its equipment and materials ecosystem while maintaining technological leadership in advanced products like HBM and next-generation DRAM.
A senior industry insider stated: “Previously, competition with China was largely confined to pricing or commoditized products. Now, the battleground has shifted into sectors where South Korea historically held an edge—electric vehicles, batteries, high-value shipping, and semiconductor equipment. South Korea cannot directly match China in scale or cost efficiency; instead, it must adopt differentiated strategies tailored to each industry. These should prioritize maintaining high-value product positioning and core technological advantages, while achieving diversification in production bases and supply chains.”
Original source: toutiao.com/article/1880532821018828/
Disclaimer: The views expressed in this article are those of the author.