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Cars awaiting export fill a lot at the port in Pyeongtaek, South Korea. (Yonhap)

Domestic corporations working in export industries predicted that South Korea is poised to fall behind China in all 10 of its mainstay areas by 2030.

The corporations anticipated that South Korean businesses would be overtaken by China within five years — even in industries where they currently hold a competitive advantage, including semiconductors, electronics and shipbuilding.

The Federation of Korean Industries announced Monday the findings of a recent survey it had commissioned from Mono Research, which questioned 200 businesses in South Korea’s top 10 mainstay industries — including semiconductors and automobiles — from the top-ranked 1,000 in terms of domestic sales.

The survey findings showed that 62.5% of all companies that responded named China as South Korea’s biggest export competitor at present, followed by the US (22.5%) and Japan (9.5%).

Similarly, 68.5% predicted that China would be South Korea’s biggest export competitor in the year 2030, suggesting that the competition with China for exports will only intensify.

On a scale where a value of 100 represented the current competitiveness of South Korean companies, the responding businesses rated the US’ competitiveness at 107.2, China’s at 102.2, and Japan’s at 93.5. With larger numbers signifying greater competitiveness, the ratings mean that they viewed China as having already surpassed South Korea.

Broken down by sector, China was seen as surpassing Korea in competitiveness in five areas: steel (112.7), regular machinery (108.5), secondary batteries (108.4), displays (106.4), and automotives and auto parts (102.4). In effect, Korean firms saw China as more competitive than domestic industries in five of Korea’s top 10 export items. 

Korean businesses forecast that by 2030, China would have a competitiveness of 112.3 — within spitting distance of the US 112.9 — and that it would surpass Korea in all 10 major export areas. That is, Korean firms saw themselves falling behind their Chinese competitors in semiconductors, electrics and electronics, ships, petrochemicals and petroleum products, and biomedical and health products. 

The survey further found that companies that had singled out China as Korea’s biggest competitor considered China to be more competitive than Korea in nearly all areas — from price to productivity, governmental support, expert workforce and core technologies — aside from brand image.

Domestic firms saw deteriorating competitiveness of domestic products, heightened external risk factors, sluggish domestic demand, and a dearth of experts in key technologies like AI as the main hurdles to boosting Korean businesses’ competitiveness. 

The surveyed businesses said that to solve this problem would require government action in the form of reducing external risks, building up a system for fostering workforces in core sectors, expansion of investment in future technologies, and measures to increase economic efficiency, such as easing regulations and cutting taxes.

By Park Jong-o, staff reporter

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