[fn Editorial] Warning: In Five Years, All Top 10 Export Sectors May Fall Behind China

There are projections that, in five years, all of Korea’s top 10 export sectors could be overtaken by China. This outlook comes from a competitiveness survey of the top 1,000 companies in Korea, the USA, Japan, and China, conducted by The Federation of Korean Industries (FKI). According to the survey, half of Korea’s leading export sectors have already been surpassed by China, and the remainder are expected to fall behind within five years. While China’s technological leap is not new, if Korea is also overtaken in advanced fields and the gap widens, the nation’s exports and growth could face a serious downturn. It is imperative to recognize this risk, reassess the foundation of corporate competitiveness, and seek solutions.
China has already surpassed Korea in sectors such as steel, general machinery, secondary batteries, displays, and auto parts. These are also the industries where Korean companies are struggling against China’s aggressive entry into the domestic market. The outlook is even more concerning, as similar trends could emerge in semiconductors, electrical and electronics, shipbuilding, petrochemicals, and bio-health within five years.
Predictions that the competitiveness gap will widen over time only heighten the sense of crisis. In particular, for secondary batteries, general machinery, and steel—sectors where Korea has already been overtaken—China’s dominance could become even more pronounced in five years. This highlights how difficult it is to catch up with companies that have gained the upper hand. Although Korean product brands are currently considered superior to those from China, it is forecasted that even this advantage may disappear in five years. The warning that not only product competitiveness but also brand power could diminish is alarming. Comparisons with the USA are not much more optimistic; only two sectors—shipbuilding and secondary batteries—are expected to be more competitive than their American counterparts in five years.
Above all, the public and private sectors must exhaust every possible means to enhance product and technological competitiveness. Major companies such as Samsung Electronics and Hyundai Motor have announced large-scale domestic investment plans to dispel concerns about the hollowing out of domestic industry due to massive investments in the USA. The Big Four conglomerates have pledged to invest over 800 trillion won in Korea by 2030. The government must provide meticulous support to ensure these investments are not made under duress. Swift investments must lead to unrivaled product competitiveness, thereby solidifying Korea’s export leadership. There is much for the government to do to make this a reality.
In response to the companies’ large-scale investment commitments, President Lee Jae Myung remarked, 'There is no point in talking about being pro- or anti-business. We will do whatever it takes.' He also stated, 'Companies are at the forefront of solving economic challenges. If you can specify which regulations should be eased, lifted, or abolished, we will promptly address them.' Having led the United States–Korea Tariff Negotiations, President Lee Jae Myung likely understands the importance of businesses better than anyone. These promises must not remain mere words; they must be translated into concrete systems and policies.
Despite repeatedly emphasizing growth centered on businesses, the Lee Jae Myung administration has moved in the opposite direction legislatively. The passage of the Yellow Envelope Act (Labor Union Act) and amendments to the Commercial Act, both strongly opposed by businesses, are prime examples. The ruling party is also pushing to complete a third amendment to the Commercial Act this year, which would mandate the cancellation of treasury shares. The same goes for extending the retirement age. While a flexible system that allows for rehiring necessary personnel according to each company’s circumstances would be more realistic, the government has been inflexible. At the same time, it continues to ignore the urgent need for exceptions to the 52-hour workweek regulation for research positions. The government has also remained passive regarding the high electricity costs in factories and industrial complexes. In such an environment, it is difficult for corporate investments to yield results. It is time for the government and the political establishment to change.