Industrial component competition heats upChina has passed Korea in the competitiveness of at least 40 percent of all industrial components the two countries export, a Hyundai Research Institute report said yesterday.
The report said Korea has seen fierce competition from China in 28 of 46 components widely used in the fabricated metal, general machinery, computer and office equipment, electric machinery, electronics, precision machine and transportation machinery industries.
China is now ahead of Korea on 19 of 46 components, HRI said.
China has a similar export structure to that of Korea and that makes its rapid improvement in components a serious threat, said Han Jae-jin, who wrote the HRI report.
The Export Similarity Index between Korea and China in the components industry rose from 0.36 in 2000 to 0.43 last year, HRI said. The index is a measure of the extent to which two countries export the same products. The closer to 1, the greater the head-to-head competition.
China included industrial components among a cluster of key areas for economic development and has fostered them for several years, HRI said.
“Not only do we need improvement in the components themselves, we also need to improve the infrastructure for developing components,” Han said.
China may be acquiring technological know-how in manufacturing of components partly through the products it imports from Korea.
According to a recent survey by the Korea International Trade Association, made-in-Korea products were 9.24 percent of all goods imported by China last year, up from 9.17 percent in 2012. That is the largest portion for a single exporter, putting Korea past Japan, whose share dropped from 9.78 percent in 2012 to 8.19 percent last year.
BY MOON GWANG-LIP [firstname.lastname@example.org]