Intensified export competition between Korea and China in the ASEAN market
|Author||Min Hyukki, Lee Seungyup||Date||2016.09.26||Issue No||634|
ASEAN has become more important as an export market for Korea due to the stable economic growth of the region and the expansion of consumer markets. For Korea, ASEAN is the second largest export market and investment target.
Recently, in the ASEAN market, export structure between Korea and China has continuously become similar. Also China’s market share has rapidly increased due to its strengthened export competitiveness.
●Export Similarity Index between Korea and China rose from 66.2 to 70.2 between the year 2010 and 2014. During the same period, China’s market share in the ASEAN’s major four nations went up by 4.7 percent points (from 15.1 percent to 19.8). It surpassed the 1.2 percent point increase of Korea (from 6.4 percent to 7.6 percent).
Above all, China demonstrates apparently stronger competitiveness than before in the Korea’s leading export industry except for petroleum products
●Also, competition between Korea and China has been intensified in the field of high-tech industry including ICT, where Korea has had the upper hand.
Therefore, Proper strategies of export expansion are urgently needed, which brace for the expansion of the ASEAN market and the intensified competition with China.
●It is necessary for Korea to push ahead with differentiated strategies in many aspects such as maintaining price competitiveness by obtaining global production network; enhancing product preferences through localization of components, materials and manpower; improving warranty services and protecting consumers.
●It is also important to strengthen the G2G cooperation. Above all we need to operate a private and public joint export expansion body for the continuous response strategies. Also, we need to conclude FTA deal with each member state and suggest Korea-ASEAN initiatives for stronger export base in the middle to long term period.