"Expansion of Export Gap in New Industries between Korea and China... Export Structure Needs Restructuring"

Martial Arts, Publication of 'Diagnostic Report on Export Competitiveness and Economic Contribution of 5 Major New Growth Industries'
Export Share of 5 Major New Industries in China Expanded by 1.6%p from 2016 to 2021

Although global trade in the 5 major new growth industries (next-generation semiconductors, next-generation displays, electric vehicles, secondary batteries, and biohealth) is rapidly expanding, the export share gap between South Korea and China in these 5 new industries is widening, according to a recent study.

On the 3rd, the Korea International Trade Association's International Trade and Commerce Research Institute released a report titled "Diagnosis of Export Competitiveness and Economic Contribution of the 5 Major New Growth Industries," revealing these findings.

The global trade volume of the 5 new industries increased 1.8 times from $1.6 trillion in 2016 to $3.2 trillion in 2021, accounting for about 14% of total global exports. Since 2016, the global export shares of China (up 1.6 percentage points), Germany (up 0.9 percentage points), and Vietnam (up 0.7 percentage points) in the 5 new industries have increased, while those of the United States (-1.0 percentage points), Japan (-0.6 percentage points), and South Korea (-0.1 percentage points) have either declined or stagnated. Since 2011, the export share gap between South Korea and China in the 5 new industries has widened, with the gap reaching 8.1 percentage points in 2021, an increase of 1.7 percentage points from 6.4 percentage points in 2016.

Among the 5 major new growth industries, China showed the highest global export shares in three categories: next-generation semiconductors, next-generation displays, and secondary batteries, while Germany and the United States led in biohealth and electric vehicle exports. Notably, China's electric vehicle export share surpassed South Korea's 6.6% in 2021, reaching 9.5%, and the export share gap between South Korea and China in secondary batteries also expanded by 25 percentage points in 2021.

Additionally, the report analyzed changes in export competitiveness of the 5 new industries from 2016 to 2021 using global export share (MS) and the export competitiveness index (symmetric revealed comparative advantage index, RSCA). The analysis showed that South Korea's electric vehicles and next-generation semiconductors improved their market share (2.4 percentage points, 0.6 percentage points) and export competitiveness index (2.4 points, 0.04 points) by 2021, performing well in the global export market. Conversely, exports of next-generation displays and secondary batteries saw declines in market share (-3.3 percentage points, -3.5 percentage points) and slight decreases in export competitiveness index (-0.06 points, -0.09 points) since 2016, indicating stagnation in global market competitiveness.

In particular, Vietnam's export share in next-generation displays surged by 9.4 percentage points since 2016, surpassing South Korea, while China's export share in secondary batteries rose to 33.9% in 2021, further widening the gap with South Korea. Biohealth exports from South Korea stagnated at around 1% market share and showed the only continuous comparative disadvantage in export competitiveness among the 5 new industries, highlighting the urgent need for improvement in international competitiveness.

Hong Ji-sang, a research fellow at the Korea International Trade Association, stated, "Over the past decade, new growth industries have driven South Korea's export growth with rapid expansion, contributing 19.2% to the country's economic growth last year and accounting for 33.4% (1.58 million people) of total export-related jobs, establishing themselves as a core engine of our economy and employment." He added, "Compared to major countries, South Korea's export share in the 5 new industries is very high, but nearly two-thirds of this is concentrated in next-generation semiconductors (16.9 percentage points), meaning exports in other new industries remain at only 1% to 3% levels."

He continued, "Efforts to steadily expand the scope of new growth export industries, maintain a balanced new industry portfolio, and aggressively develop the biohealth export market?the largest new growth sector?must be supported by industrial development and regulatory improvements."

This content was produced with the assistance of AI translation services.