On March 2, South Korea's "South Korea" published an article saying that the survey found that 13 of the 20 products that China imported more from South Korea last year had a decline in China's market share than one year ago. Even with the remaining seven products, which have increased their market share, China's global imports are decreasing, and there are concerns that the competitiveness of Korean products in China will decline in the future.
Recently, the International Research Institute of the Korea International Association (KITA) published a report entitled "Diagnosis and Evaluation of the Causes of China's Deficit". In the report, Kita noted that 13 of the top 20 Korean products imported by China saw a decline in market share in the Chinese import market last year compared to 2022. In particular, due to the decline in demand for information technology (IT) products in China last year, the display (-49%), computer (-38%) and semiconductor equipment (-3.).2%). In addition, the market share of non-IT products such as petroleum products, base oils (ethylene, etc.), and synthetic resins also decreased by 1 to 3 percentage points.
The market share of the remaining 7 products increased. The proportion of petrochemical intermediate raw materials increased by 28 percentage points, the largest increase among the top 20. In addition, the market share of glass products increased by 21 percentage point, the market share of 5 products such as fine chemical raw materials increased by 02-0.9 percentage points. However, KITA analysis said that even these seven products, China has reduced imports in the global market, so this year cannot expect the same results as last year.
"When assessing export competitiveness, the factors that led to the decline in South Korea's exports to China were, in order: weakening of the product mix (37.).9%), the competitiveness of Korean products in China has weakened (319%), weakening Chinese demand (30.).1%）。U.S. products have the highest degree of competitiveness in China, at 55 percent, followed by South Korea, where the influence of Korean products is on a downward trend among major countries.
Kita also noted that the balance between electrification products such as electric vehicles, cathode materials and lithium-ion batteries with China is rapidly deteriorating. Electrified products had a deficit of $4 billion in 2020, following a deficit of $16.4 billion last year after 2021 ($7.8 billion) and 2022 ($12.9 billion). Kita added, "In addition, the trend of declining revenue and expenditure of other traditional non-IT products is also an obstacle to turning losses into profits for China." ”
For this reason, Kita**, due to the increase in China's imports of South Korean IT products this year, the balance of payments with China will improve, but it is judged that it is difficult to maintain the same surplus with China as in the past. The growth rate of China's IT product demand is expected to be 9 this year3%, which is higher than the growth rate of global IT demand (6.).8%), but it is expected that it will only be able to recover the decline in exports of IT products that has declined last year.
Kim Woo-jong, a researcher at Kita, said, "Since China is still South Korea's largest export market, it is necessary to ** changes in local consumption trends and import structure, and work accordingly to change our export structure." He added, "To help South Korea gain a comparative advantage in the industry of the future, we need to develop a comprehensive national strategy, including developing domestic skilled talent and expanding investment in R&D." ”