May 07, 2016 08:23
The speed of growth in China's manufacturing industry has surpassed Korea's biggest fears, and Korea is no longer a technological benchmark.
At the National People's Congress in March last year, Beijing instead announced a goal of catching up with the manufacturing industries of Japan and Germany by 2025 and rivaling the U.S. by 2045, relegating Korea to the second tier.
Lee Hyun-tai at the Korea Institute for International Economic Policy said, "China believes it has already caught up with Korean manufacturing, and once it arms itself with cutting-edge technology it will become a real threat."
At major international expos, China is pulling ahead. At the Consumer Electronics Show in Las Vegas, the U.S. in January, where Korean firms had taken center stage until 2010, the halls were filled with Chinese products. Haier, Hisense, TCL and Huawei set up sprawling booths next to Samsung and LG.
The situation was the same at the Mobile World Congress in Barcelona, Spain in February. The head of one Korean home appliance company said, "There seems to be no gap in technology any more."
China adopted Korea's strategy of investing heavily in new facilities to bolster quality and price competitiveness, but it boasts a larger scale and is catching up quickly. It has also established major refineries and chemical plants over the last three or four years and now possesses the capacity to process 3.4 times more crude oil than Korea at 10.5 million barrels a day.
Even Korean automakers are struggling against intensifying Chinese competition. Hyundai's sales in the Chinese market last year dropped 5.1 percent as competition there intensified due to local rivals such as FAW. And where it takes Hyundai's Ulsan plant here 26.8 hours to roll out a car, it only takes its Chinese factory 17.7 hours.
According to a study last year by the Korea Institute of Science and Technology Evaluation and Planning, Korea's lead over China in electronics, IT, manufacturing and processing has now narrowed to just 1.7 or 1.8 years.
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