According to a report released by the Korean Economic Association on November 17, half of South Korea's top ten export industries have already been surpassed by China in terms of corporate competitiveness, and it is expected that all ten industries may lose their competitive edge within five years.
The report states that the Korean Economic Association recently conducted a survey titled "Current Status and Outlook of Competitiveness Among South Korea, the United States, China, and Japan" among 200 companies engaged in the top ten export industries. The results showed that when asked about their biggest competitor, 62.5% of South Korean companies answered "China," far exceeding the percentage of companies that chose the United States (22.5%) and Japan (9.5%). If the time frame is set for 2030, the percentage of South Korean companies choosing "China" further increased to 68.5%. This means that most South Korean companies believe that competition between South Korea and China in exports will intensify further.
Left: The biggest competitors chosen by South Korean companies; Right: The competitiveness levels of American, Chinese, and Japanese companies as evaluated by South Korean companies. Provided by the Korean Economic Association
Additionally, the surveyed South Korean companies generally believe that American and Chinese companies have stronger competitiveness. Assuming the competitiveness standard of South Korean companies is 100, the surveyed companies evaluated the competitiveness levels of the United States, China, and Japan as 107.2, 102.2, and 93.5, respectively. By 2030, the competitiveness levels are still ranked from high to low as the United States (112.9), China (112.3), and Japan (95). In other words, South Korean companies believe that their domestic enterprises have fallen behind both China and the United States, and Chinese enterprises' competitiveness will reach nearly that of the United States within the next five years.
Looking at the sectors, the surveyed South Korean companies believe that Chinese companies lead over South Korean companies in five areas: steel (112.7), general machinery (108.5), batteries (108.4), displays (106.4), and automobiles and parts (102.4). However, they still lag behind in semiconductor (99.3), electronics and motors (99), ships (96.7), petrochemicals and petroleum products (96.5), and biotechnology and health (89.2). Nevertheless, according to industry forecasts, all of South Korea's top ten export industries will be surpassed within the next five years.
Figure showing the competitiveness levels of South Korean and Chinese enterprises in 2025 and 2030. Provided by the Korean Economic Association
The report pointed out that China has advantages in price competitiveness, production capacity, and government support, while the United States leads in brand, specialized talent, and core technology. Compared to China, South Korea currently only leads in brand competitiveness, which is likely to be surpassed within five years. Compared to the United States, the gap between South Korea and the U.S. is expected to widen in all areas except productivity.
Left: Comparison of competitiveness levels of South Korean and Chinese companies in various fields; Right: Comparison of competitiveness levels of South Korean and American companies in various fields. Provided by the Korean Economic Association
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