Korean Companies in Top 10 Export Industries Projected to Lose Competitiveness to Chinese Firms by 2030
A survey has revealed that companies in South Korea’s top 10 export industries will lose their competitive edge to Chinese companies in just five years by 2030. This indicates that the “China phobia” among domestic companies that have driven Korea’s economic growth may not remain merely a concern but could become a reality.
According to the Federation of Korean Industries (FKI) on Nov. 17, this finding emerged from a survey of 200 companies among the top 1,000 companies by revenue in the top 10 export industries. Based on current standards, with domestic company competitiveness set at 100, the United States (107.2) and China (102.2) are ahead of Korea, while Japan (93.5) trails by 6.5 points. By 2030, the corporate competitiveness of the United States (112.9) and China (112.3) is projected to reach comparable levels, further widening the gap with Korea. Japan’s (95) corporate competitiveness is expected to continue lagging behind Korea.
According to the FKI survey, when Korean companies’ competitiveness by sector is set at 100 based on the current period, China already leads Korea in five industries: steel (112.7), general machinery (108.5), secondary batteries (108.4), displays (106.4), and automobiles and parts (102.4). The perception that Korea trails China in secondary batteries, considered a core future industry, and automobiles, Korea’s flagship industry, is dominant among domestic companies. In the remaining five industries, Korean companies maintain competitive advantages in semiconductors (99.3), electrical and electronics (99), shipbuilding (96.7), petrochemicals and petroleum products (96.5), and bio-health (89.2), but surveyed companies expect all of these to be overtaken by China by 2030.
The projection that Korea will lose its competitive edge even in semiconductors suggests that the Chinese government’s strong industrial policies and massive capital investment have profound impacts on Korean industries overall. China has already rapidly pursued industrial advancement centered on capital-intensive and high-technology industries through government-led industrial development policies such as “Made in China 2025.” In the three industries where China already holds advantages—secondary batteries, steel, and automobiles and parts—the Korea-China competitiveness gap is expected to widen further, heightening crisis awareness in Korean industries.
62.5% of domestic companies identified China as their main competitor in current export markets, and China’s influence (68.5%) is expected to remain overwhelming in 2030. The FKI noted, “In five years, Korea is expected to fall behind China even in product brand competitiveness, with gaps in other factors expected to widen further.”
Companies cited weakening domestic product competitiveness (21.9%) and increasing external risks (20.4%) as causes of Korean corporate competitiveness decline. They also pointed to domestic demand stagnation due to population decline (19.6%), shortage of core technology personnel in areas like artificial intelligence (AI) (18.5%), and labor market and corporate legal systems that lag behind competitor countries (11.3%). As government support tasks, they requested minimizing external risks (28.7%), establishing core personnel training systems (18%), regulatory easing and labor flexibilization (17.2%), and expanding support for future technology investment (15.9%).