Korea losing ground in manufacturing sector

By Kim Jae-won

Korea is losing competitiveness in the global manufacturing sector with the number of its world’s top product items falling by 10 or 14 percent in 2011 from a year ago, according to a local research center said Sunday.

In its latest report, the Institute for International Trade (IIT) said that a total of 61 items produced by Korean companies topped the list of the global exports market in 2011, down 10, or 14.1 percent from a year earlier.

The number of products excluded from the top ranking was 26, while that of items that became the No. 1 stood at 16.

Experts say it is largely due to Chinese companies, which overtook their Korean counterparts on the global markets thanks to their rapidly developing technology prowess and relatively cheap labor cost.

“China is the biggest rival of Korea in the overseas markets. We need to set up strategies to fight threats from Chinese companies,” said Kang Seok-ki, a researcher of the IIT, an in-house think tank of the Korea International Trade Association (KITA), in the report.

China dethroned Korea in 12 items on the global market in 2011, while the U.S., Germany and Spain had three, respectively. Japan surpassed Korea in two products. In total, 26 items from Korean companies, mainly in the liquid device, petrochemical and steel industries, were dethroned from their top places by rival countries.

Meanwhile, Korean companies have also gained global supremacy in the export of 10 new items, largely in the industries of steel, chemical and textile, surpassing their competitors in the U.S., Italy, Japan and Germany. Forty-five items, including semiconductors, steels, ships, petrochemicals and auto parts, have kept the top place.

Observers say that the report illustrates Korean exporters’ agony. Korea is chased by their rivals from emerging countries such as China, in terms of technology and lags behind in price competitiveness, but still has a long way to go to catch up with their advanced competitors, such as Japan, the U.S., and other European countries, in technology and brand power.

China topped the list of the number of the world’s best-selling export items with 1,431 in 2011, according to the IIT report, followed by Germany with 777. The U.S. came third with 589, while Italy and Japan wrapped up the top-five list with 230 and 229, respectively.

Korea ranked 15th with 61, though it ranked seventh in terms of volume of exports, showing it needs to focus on developing top brands.