Neighborly Competition
While Korea and China are increasing their proportions in the world’s economy, Japan is losing ground in the IT sector, one of its major industries. It is expected that Japan will continue to suffer from a slump in exports and the manufacturing industry.
Statistical data released by the International Monetary Fund (IMF) on Nov. 5 says that Korea accounted for 3.3 percent (sixth place) in world exports, while Japan accounted for 3.9 percent (fourth place). Ten years ago, in 2005, Korea took up 2.7 percent (12th place) while Japan got 5.7 percent (fourth place). The gap between the two nations was pared down to 0.6 points from 3.0 percent for ten years.
During the same span, China’s share expanded to 13.1 percent. According to data by the Korea International Trade Association, Japan inked US$690,190,0 million in exports last year, accounting for 3.75 percent of global exports. Korea’s exports added up to US$572,651 million, which was 3.1 percent of world exports. So, the gap between the two was not wide.
According to data on market share in 50 major countries by the Korea Trade-Investment Promotion Agency (KOTRA), Korea enjoyed a market share of 3.06 percent in 50 countries in the U.S., China and the EU in 2004. This percentage was less than that of Japan (7.73 percent).
But ten years later, in 2014, the market share of Japanese products fell to 4.51 percent by 3.22 percentage points, but Korea’s market share slightly increased to 3.34 percent. This means that Korea grew, but Japan faltered in the world market for ten years.
Over the past ten years, Korea elevated the competitiveness of its manufacturing industry and exports with semiconductors, displays, TVs and smartphones as the center. But the downfall of Japan’s traditional electronics giants such as Sony, Panasonic and Sharp forced Japan to lose its competitiveness in the world manufacturing industry and export market.
Analysis says that the manufacturing industry triggered the weakening of corporate Japan. According to a report released by the Korea Institute for Industrial Economics and Trade earlier this year, Japan’s proportion based on nominal added value was 20.7 percent in 1995, while that of Korea 2.4 percent. But that of Japan plummeted while that of Korea slightly rose. In 2012, Japan and Korea recorded 9.7 percent and 2.8 percent, respectively, narrowing the gap between the two.
Specifically, Japan’s downfall is prominent in the manufacturing industry. A report released by the Korea Institute for Industrial Economics and Trade earlier this year, Japan’s proportion based on nominal added value, stood at 20.7 percent, while that of Korea was merely 2.4 percent. But Japan’s proportion nosedived, while that of Korea inched up. Thus, Japan and Korea chalked up 9.7 percent and 2.8 percent, respectively. In the global manufacturing industry, China’s chunk expanded 2.5-fold from 9.0 percent in 2004 to 22.4 percent in 2012.