Korea faces vying with Chinese firms in China's domestic market: report

Korean firms will soon be forced to compete with Chinese firms in China's domestic market rather than cooperating with them for overseas markets amid the slowing Chinese economy, a think tank said Sunday.

The Chinese economy may face an L-shaped slump in the near future, LG Economic Research Institute said in a report, calling for local exporters to brace for a change in the Chinese market.

The Chinese economy is facing qualitative changes, shifting its main driver to the domestic service industry from manufacturing for exports, the report said, adding the world's manufacturing plant is moving into the world's consumption market on the basis of its huge population.

It will be difficult for South Korean companies to shun stiff competition with Chinese companies in the Chinese domestic market as the world's second-largest economy shifts to a domestic-oriented economy from an export-oriented economy, the report said.

"The Chinese economy is forecast to bottom out in the third quarter and move sideways in the mid- or upper-7 percent range for a while," the report said.

The Chinese economy grew 7.4 percent in the third quarter from a year ago.

The transition in the Chinese economy means that increased demands for Korean products are gradually decreasing, the report said, calling on South Korean exporters to seek growth engines in the Chinese domestic market.

To that end, the Korean companies should secure competitive prices for their goods and build up their brand power in order to appeal to the Chinese consumers, it said. (Yonhap)