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China surpasses South Korea in advanced manufacturing: report
China has surpassed South Korea in competitiveness across most advanced manufacturing industries, excluding memory chips, according to a report by the Korea Institute for Industrial Economics & Trade (KIET).
The report, based on a September survey of industrial experts, highlights China’s advantages in robotics, EVs, batteries, and semiconductors outside the memory sector.
South Korea maintains a slight edge in research and development for industrial robots, particularly in product design, but China leads in component procurement, mass production, and overseas market presence.
In the EV industry, Korean firms excel in after-sales services and market share, while Chinese companies are stronger in autonomous driving.
Korea remains a leader in memory chip technology, but China has an upper hand in AI chip design and system semiconductors.
KIET’s Cho Eun-kyo noted that competition has shifted beyond technology to include supply chains and industrial ecosystems, urging Korea to adapt its strategy accordingly.
🔗 Source: Yonhap
🧠 Food for thought
Implications, context, and why it matters.
China’s lead across most value chains, with some Korean R&D strengths
- KIET said China outpaces South Korea across most of the value chain in robotics, EVs, batteries, and self-driving (autonomous) vehicles, covering R&D, supply chains, production, service, and market demand 1.
- On KIET’s 7-point competitiveness scale where scores above 4 mark a Chinese lead, self-driving cars scored 5.3, robots scored 5.0, EVs scored 5.0, and batteries scored 4.8 1.
- For semiconductors, KIET found China ahead of South Korea on 19 of 30 criteria, with strength in technology, pricing, and infrastructure in chip design that includes AI chips, while South Korea stays ahead in memory chips 1.
- South Korea keeps a narrow R&D advantage in industrial robots, especially product design, while China leads on component procurement, mass production, and overseas market presence.
- KIET tied this gap to China’s buildup since 2015 under the “Made in China 2025” strategy, including higher localization of core parts and equipment in several sectors 2.
Pressure on Korea’s “super-gap” framing and the case for a new strategy
- KIET said South Korea needs an industrial plan that moves past a simple “super-gap strategy,” plus a China policy built on competition and selective cooperation 2.
- In EVs, South Korean firms perform well in after-sales service and market share, while Chinese companies lead in autonomous driving.
- KIET’s Cho Eun-kyo said the contest now includes supply chains and industrial ecosystems, so South Korea should adjust its playbook.
- China has over 3,500 fabless companies (chip designers that outsource manufacturing) versus roughly 150 in South Korea, which makes direct head-to-head competition harder in some segments, based on expert commentary cited alongside KIET’s findings 1.
- KIET raised differentiation in premium markets, plus “competitive cooperation” that draws on parts of China’s advanced-industry ecosystem 2.
- KIET also said Chinese-made EVs made up nearly 30% of EVs sold in South Korea in the first half of 2024 3.
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