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| Hundreds of containers wait to be exported at Busan Harbor on May 11. Yonhap |
By Kim Hyun-bin
Korean products are losing ground in the Chinese market due to increased competition from Taiwan and ASEAN rivals, according to data and comments made by industry officials, Wednesday. The officials say a new strategy is needed to enhance Korea's position in China to regain its status as the top exporter to the country. Taiwan has been leading the Chinese market since 2020.
The Trade Research Institute under the Korea International Trade Association (KITA) issued a report, titled "Korea's decline in China's import market share and our countermeasures," showing Korea's share of the Chinese market fell by 1.9 percentage points last year compared to an 8 percent share in 2017. Korea lags behind ASEAN (14.7 percent market share) and Taiwan (9.4 percent market share).
Although China's imports of memory semiconductors, parts for wireless communication devices, synthetic fibers and paraxylene increased, demand for Korean products declined in favor of Taiwan and ASEAN countries.
In the case of Korean exports to China, the memory semiconductor market share fell from 52.3 percent in 2017 to 44.9 percent last year, and wireless communication device parts also fell from 14.3 percent to 12.3 percent. The paraxylene market share also fell from 45.6 percent to 38.7 percent during the same period.
Meanwhile, Taiwan's share of memory semiconductors increased by 3.9 percentage points, and ASEAN's share of wireless communication device parts increased by 20.5 percentage points.
In particular, the proportion of Korean products in information and communication technology (ICT) products, such as computers, communication equipment and electronic parts, decreased from 20.5 percent in 2017 to 17.9 percent last year, showing the largest decline among major countries.
During the same period, the import share of Taiwan and ASEAN increased by 5.6 percentage points and 1.9 percentage points, respectively, indicating that products made by these countries are replacing Korean goods.
"Korea's market share decline was not only due to intensified competition with neighboring countries, but also because of import substitution due to the ongoing expansion of production facilities of Korean semiconductor companies in China," the report stated.
Although China's imports are being reorganized swiftly to focus on high-tech items, Korea is failing to satisfy China in the high-tech sector.
"The changes to the industrial structure, such as China's suppression of processing trade and self-sufficiency rate of intermediate goods, may become a long-term and structural hindrance to Korea's exports to China, which consist mainly of intermediate goods," Kim Arin, a researcher at the Korea International Trade Association, said.
