By Ryu Jin
Staff Reporter
South Korean electronic home appliances still maintain their competitiveness over Chinese goods. But they need to make more value-added products to ward off challenges from rapidly developing Chinese goods, a private think tank said Sunday.
According to a report released by the LG Economic Research Institute (LGERI), South Korean electronic products have been showing an ``unexpectedly strong’’ competitive edge over Chinese products, especially in such areas as home appliances and communication devices.
In the report titled the ``Outlook for Competitiveness of South Korea, China and Japan in Electronics Industries,’’ the LGERI used measures of revealed comparative advantage (RCA) to assess competitiveness of goods made by the three Northeast Asian countries.
South Korea has seen drastic improvement in the competitiveness of home appliances, communications devices and electronic parts, while it has weakened in recent years in areas such as semiconductors, computers and office machines.
In particular, the country is found to maintain its comparative advantage over Japan as well as China in such products as LCDs, photocopiers, washing machines, digital cameras, mobile phones, refrigerators, PDPs, vacuum cleaners, A/V cards and so forth.
South Korea, however, is in fierce competition with China for LCDs, photocopiers, television parts, digital cameras and mobile phones and with Japan for A/V cards, television parts, LCD and photocopiers.
``While the country is competing with Japan in most areas except for electronic home appliances, it faces fiercer competition with China as well as Japan for LCDs, TV parts and photocopiers,’’ the report said.
Out of the total 54 product groups surveyed, Japan showed a comparative advantage in 22 groups over South Korea and China. Both South Korea and China were ahead of Japan in 10 product groups.
LGERI, however, warned that South Korea could lose its competitiveness rapidly since its export of electronic goods relies heavily on several items and it shares the main items with the two neighbors.
The institute pointed out, Chinese goods have a gap of only several years with South Korean products in competitiveness in the field of electronic home appliances.
``China poses a biggest threat to us,’’ an LGERI researcher said. ``Our home appliance industry may decline fast if Chinese firms improve the global recognition through the 2008 Beijing Olympic Games and fortify global marketing in the future.’’
South Korean electronics firms should therefore try their best to make more high value-added products while trying to maintain the core values in the country, although they might seek relocation of production bases in some areas.
jinryu@koreatimes.co.kr
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