As China undergoes a rapid transformation, driven by swift innovation and industrial growth, concerns are mounting among South Korean and international business leaders about the nation’s widening competitive gap, particularly in cutting-edge sectors like autonomous vehicles and foldable smartphones.
Reflecting this shift, one executive remarked, “This is not the China we used to know. Over the past four years, due to the COVID-19 pandemic and rising U.S.-China tensions, the country has changed drastically.” This statement was shared in a recent in-depth interview conducted by the Korea International Trade Association (KITA), which spoke with 30 business executives—both S. Korean and international—operating in China.
During the interviews, executives pointed out that China has not only caught up with S. Korea in most industries, except semiconductors, but in many areas, it has already surpassed the nation. They further explained that the sense of crisis experienced in China is much more severe than what is perceived in S. Korea. Based on these interviews, KITA plans to release a report and hold a forum on the findings at the end of November.
A draft of the 24-page report highlights the concerns felt by executives across various sectors, including automotive, parts, batteries, petrochemicals, aviation, distribution, gaming, biotech, and finance. They observed that China’s workforce is highly flexible, often working through the night if necessary, with rapid decision-making processes that enable swift implementation of ideas.
Furthermore, China’s ‘fast innovation’ strategy—where the remaining 10% of companies absorb the technology from the 90% that fail—has driven its remarkable growth. The executives also pointed out that China has undergone significant changes, especially over the past four to five years, accelerated by both the pandemic and U.S.-China tensions. One concern raised was that only a few Korean industries still maintain a competitive edge, and hesitation at this point could result in losing even that.
Chung Man-gi, a senior advisor at Dentons Lee and the lead researcher of the study, explained that while many assume China’s rapid growth is largely due to government subsidies, the greater concern on the ground is the ability of Chinese companies to innovate quickly.
He mentioned that, in the past, China was known for its slow and steady approach, referred to as ‘manman di’ (慢慢地), while Korea was characterized by the ‘ppalli ppalli’ culture, meaning ‘fast and urgent’. He added, “Now, the roles have reversed, with China embracing what they call ‘kuai kuai’ (快快), or a rapid approach to innovation.”
The interviews also revealed how China’s explosive growth is being driven by a passion for innovation, especially in sectors such as autonomous vehicles, smartphones, and gaming. This rapid progress is causing widespread concern among industry executives.
Particularly, China’s rise in the automotive sector, led by companies like BYD and Baidu, has drawn significant attention.
According to a The Korea Trade-Investment Promotion Agency (KOTRA) report, China produced about 7 million autonomous vehicles in 2022, a 45.6% increase from the previous year.
One executive from an auto parts company stated, “Over the past four years, China has aggressively pursued smart and electric vehicle development. In cities like Wuhan, level 3 and 4 autonomous taxis are already operating without drivers, while S. Korea is still working on integrating level 1 and 2 autonomous functions into its vehicles.” Since levels in autonomous driving range from 1 to 5, with higher levels indicating greater autonomy, from basic driver assistance at level 1 to fully autonomous driving at level 5, this highlights the significant gap between the two countries.
In the IT sector, one executive expressed concern, stating that it is difficult to claim that Samsung’s foldable phones are clearly better than those produced by Huawei.
Recently, Huawei became the first company in the world to launch a tri-fold foldable phone, ahead of Samsung, and it has gained popularity in the Chinese market. In 2022, Huawei and other Chinese manufacturers shipped 7 million foldable phones, an increase of over 3.7 million units (114.5%) compared to the previous year. In contrast, South Korea produced about 1.9 million foldable phones in the same period—about one-third of China’s total output.