The Bank of Korea (BOK) said in a report titled “China’s economic structural change and its implications” published in “Foreign Economic Focus on July 16 that the competition between South Korea and China gets tougher in the global market so South Korean companies should actively seek to enter the Chinese domestic market.
The report said, “Due to changes in China’s economic structure, the role sharing structure between South Korea and China in terms of trade and investment relationship is getting weaker and the competition between the two is growing more fierce.”
China’s share of information technology (IT) items in the global market has nearly doubled from 15 percent to 30 percent during the past decade and its share of other items has continuously increased as well.
China has the largest share of the global market for 1,762 export items in 2015, more than doubled from 760 in 2003. South Korea’s number of top-ranked items stood at 68 in 2015 and China has the second largest share for 17 out of the 68.
As the primary industry between South Korea and China has overlapped and China’s technology has been improved at a rapid pace, the gap of industrial technology between the two has been narrowed. China has been seeking to raise the technical levels of the manufacturing industry as well as the self-sufficiency rate.
In terms of spending, moreover, the country is trying to create the consumption-centered growth structure based on the increase in income. However, South Korea’s exports of consumer goods to China are still small in size. Consumer goods account for only 3 percent of South Korea’s total exports to China while components and half-finished products take up 48 percent and 28 percent, respectively.