December 09, 2014 13:20
Half of Korea's eight major export products have been overtaken by Chinese rivals in terms of global market share over the last decade. The Federation of Korean Industries on Monday said that Chinese rivals have gained a bigger slice of the global market for smartphones, automobiles, ships and petrochemical products.
Korean-made smartphones accounted for 30.1 percent of the global market in the second quarter but Chinese phones for 31.3 percent. China overtook Korea in automobile output back in 2009 and beat Korea in shipbuilding last year.
Korea lost to China in petrochemicals production in 2004, and the gap is widening even further each year. At present, Korea is only ahead of China in semiconductors and displays.
Chinese manufacturers are likely to threaten more Korean industries backed by strong support from their government and experience as the world’s factory. They have been making huge strides in terms of technology as well, with the technological gap narrowing from 2.5 years in 2010 to 1.9 years in 2012. And a weak yuan policy is making things worse for Korea.
Xiaomei, which overtook Samsung in smartphone sales in China, is not just an ordinary smartphone maker. It sells the devices at discounts but generates revenues by selling apps and other services. Chinese companies are trying new tactics, but Korean businesses rest on their laurels.
They are in for a nasty surprise. Korean firms need to come up with innovative new products and the government has to cut red tape. The country cannot afford to lose more ground.
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