Increasing Threat
Chinese manufacturers are posing an increasing threat, in terms of not only price but also product quality and technological strength, to companies representing Korea such as Samsung Electronics, POSCO, and Hyundai Motor Company. The former are accelerating their R&D activities these days, while the latter have shown poor performance since last year.
According to a recent EU report, 198 Chinese companies were found on the list of the top 2,500 R&D investors of the world for 2013, whereas the number was just 80 for Korea. Huawei invested 3.5 billion euros (US$3.9 billion) for R&D purposes in 2013, beating LG Electronics (2.2 billion euros, US$2.4 billion) and Hyundai Motor Company (1 billion euros, US$1.1 billion). The combined investment of the 79 Korean companies, excluding Samsung Electronics, stood at 9.67060 billion euros (US$10.79046 billion), easily eclipsed by China’s 20.3289 billion euros (US$22.6830 billion) of investment.
In the meantime, the Korea Institute of Science and Technology Evaluation and Planning recently announced that Korean companies were just 1.4 years ahead of the Chinese in terms of technology level in 2014, while the gap had been 2.5 years in 2010.
In the first quarter of this year, Samsung Electronics ranked fourth in the Chinese smartphone market, overtaken by Xiaomi and Huawei as well as Apple. Hyundai Motor Company’s sales volume in China also dropped during the period to approximately 266,000 cars. Chinese companies accounted for 33.5 percent of the global LCD TV market in that quarter to exceed the combined market share (33.0 percent) of Samsung Electronics and LG Electronics. Chinese steelmakers have already driven POSCO out of the market as far as steel materials for construction use are concerned.