Korea is predicted to lose competitiveness in seven of its eight major export industries within three years, with the only exception being shipbuilding.
The Korea Economic Research Institute disclosed on Nov. 25 the outcome of its recent survey on Korean industrialists.
According to the survey, South Korea currently has a competitive edge in four of the eight industries -- wireless communications equipment, display, oil products and shipbuilding.
Korea's biggest rival in these industries is China, whose competitiveness level is 90% of Korea's.
In the remaining four industries -- semiconductors, steel, automobiles and petrochemical products -- Korea already lags behind industry leaders in competitiveness.
The frontrunners are the United States in the semiconductor industry whose competitiveness is 130% of Korea's, Japan in steel (110%) and automobiles (130%) and Saudi Arabia in petrochemicals (110%).
Korean industrialists forecast that among the eight industries, Korea would be able to maintain a competitive edge in shipbuilding alone three years later.
China is predicted to reach Korea's competitiveness level in oil products and steel in three years, while overtaking Korea in display and wireless communication equipment.
Korean industrialists forecast that South Korea would face a dire situation as a result of China's rapid development in key industrial sectors.
“Korea would be able overcome a financial crisis without significant difficulties if its industries are strong and competitive. But Korea's major industries are losing their competitive edge, making the country vulnerable to a crisis,” the institute said. “The South Korean government would be well advised to speed up deregulation, slow down a rapid increase in minimum wage, and refrain from strenthening regulations that hinder corporate investment.”