Korea behind China in life-item sector competitiveness

By Choi Sung-jin

Korea has fallen behind China in manufacturing competitiveness of household items, such as furniture, kitchen articles and small home appliances, a business association said Tuesday.

As with an increasing number of manufacturing areas, these companies lag behind their Chinese counterparts in price competitiveness, and are being pushed aside by U.S. and European rivals in non-price competitiveness, the Federation of SMEs said, based on a recent survey.

“Korean household-item manufacturers’ competitiveness is 11.5 points lower than that of the U.S. companies, and 2.1 points behind the Chinese,” it said.

The federation calculated the competitiveness index by comparing the organic connectivity of industrial policy, infrastructure and other factors, assuming the Korean industry’s level at 100.

In price competitiveness, China’s level was 116.4 points, and those of the EU and U.S. were at 97.9 and 97.3, respectively. In non-price competitiveness, such as quality, design and brand value, Korean companies were more than 10 points behind the U.S. and EU.

As the biggest competitors of Korea’s small- and medium-sized enterprises making these everyday items, 76.7 percent of respondents cited China, followed by Japan (43.6 percent), and the U.S. (19 percent).

Asked what was most urgently needed to strengthen their competitiveness, the largest share of respondents pointed to policies that help to speed the “development of technology,” followed by “new marketing openings” and “financial support.”

“Now that we have confirmed the poor competitiveness of household item makers, it is urgent for the government to promote the sector systematically,” said Kim Kyung-man, who leads the federation’s department responsible for industrial support. “The federation will seek to enact laws aimed at helping the SMEs get over the walls hindering further growth.”