Korea-Standstill, China-Jumping

While Korea has been standstill in US export market, China took over Korea and caught up Japan almost.

According to report of ‘Analysis of the Competition of Korea, China and Japan’ by Kotra at 6th, from 1993 to 2002, annual average growth rate of exporting to US by China was 16.5%, and has been ahead 9.6% of Korea much more. In case of Japan, annual average growth rate of exporting to US was 3.3%, and much below than US importing growth rate of 9% during the period.

In the occupation rate of US importing market, China shows remarkable advance as following;△ China 5.4% →9.0% △Korea 3.0%→3.1% △Japan 18.5%→11.1%.

US shares 20.7% of total Korean export and is the first exporting market. In US importing market, Japan, China and Korea marks ranking 3rd ,4th and 7th respectively. The remarkable advance of China is analyzes as the results of price competitiveness and the increase of exporting items.

In case of the last year, China exported to US 1,078 items and was ahead of Korea (932 items) and Japan (1,058 items). For last 10 years, In case of China, exporting items increased by 117 units, Korea by 92 units, but Japan decreased by 2 units. In the comparison of the occupation rate of 3 main exporting items, Korea and Japan share 73.0% and 74.2% respectively, but China marked only 44.6%. It means that Chinese exporting is diversified.

The top ranking items in US importing market, China has occupied from 67 items to 147 items by increasing 80 items. Korea only increased from 12 items to 13 items. In Japan’s case, the items decreased from 174 to 92.

In China’s case, the main exporting items are diversified from simple light manufacturing such as footwear, toy, etc to high technology products such computer, electronic application components, wireless communication equipment, etc.

Korea competes in 178 items against China for US importing market, and in 157 items against Japan. As the remarkable advance of China, Korea will have severe competition with China in the future, and competing items will increase to high technology industry such as in electronics & electrical, machinery, etc.

Eom Pil-sung, Team Leader of KOTRA commented, “To compete against China for US importing market, Korea companies should restructure export items with high value added products required high technology and brand. Aggressive marketing activities should be also performed.”

Kang-Woon Lee kwoon90@donga.com