Going Overseas to South Korea! Seeking Globalization Opportunities in Four Major Future Industries

TMTPOST--SouthKorea,aleadingeconomicandtradepartnerclosetoChina,isbecominganimportantnodeintheglobalizationprocessofChineseenterprises.

Astheworld'sfourth-largeste-commercemarket,SouthKorea,TEMUenteredtheSouthKoreanmarketan,Alibabaannouncedplanstoinvest$1.1billioninbuildingalogisticscenterinSouthKoreaoverthenextthreeyears,,Alibaba',,thescaleofSouthKorea'se-commercehasreached$170%.

InMarchofthisyear,sforenteringtheSouthKoreanmarket.

AccordingtothelatestdatareleasedbytheMinistryofTrade,IndustryandEnergyofSouthKorea,inthefirstsevenmonthsofthisyear,thetotalvalueofChineseelectricvehiclesexportedtoSouthKoreareached$848million,anincreaseof848%,amajorglobalautomotivebrandhub,forthefirsttime.

Whyhasthiscountry,withapopulationoflessthan60million,becomeoneofthemostsuccessfulinglobalization?AndwhycanitbecomeanimportantchannelforChineseenterprisesgoingabroad?WhatcanChinesebrandslearnfromSouthKorea?TheAsianFinGlobalBusinessLeadersClub,jointlyinitiatedbyTMTPostandtheAmericanAsianFin,willorganizea4-day,3-cymakersandrepresentativesofleadinglocalindustries,aswellasin-depthvisitstoleadingSouthKoreanenterprisessuchasSamsungBiologics,CJLogistics,andHyundai,toexploreopportunitiesforSino-Koreanindustrialcooperationundertheneweconomicandtradestructure.(Directregistrationlinkattheofthearticle)

SouthKoreaisapioneerworthlearningfromincreatingglobalbrands.

SouthKorea'alinnovationindustries,itjoinedtheinternationalcommunityandwasdubbedthe"MiracleontheHanRiver."Itnotonlyproducedworld-classhigh-homeappliancebrandslikeSamsungandLGbutalsocreatedtheglobalphenomenonof"Hallyu"withitsvarietyshowsandKoreandramas.

In2024,SamsungElectronicswasrankedintheTOP5ofthe"BestGlobalBrands"listbytheglobalbrandconsultingcompanyInterbrandforthefifthconsecutiveyear,withabrandvalueof$100.8billion,surpassingJapan'sSonyandPanasonic,andbeingtheonlyAsiancompanyintheTOP5.‌

Theglobalhigh-brandSamsungwasoncesynonymouswithcheapgoods,pursuinglarge-ngglobal.

TheneighboringcountriesofChinaafervaluablelessonsforChineseenterprises.

InapreviousarticlebyTMTPosttitled"TheKoreanCarOverseasExpansionRevelation,"itwasnotedthatHyundaiMotorGroup(mainlycomprisingHyundaiMotorandKiaMotors),onceagainrankingthirdglobally,,HyundaiandKia',,thebest-performingChinesecarcompany,BYD,

(ImagegeneratedbyAI)

ComparedtoKoreancars,Chineseoverseasbrands,representedbynewenergyvehicles,,someinternationalcarcompaniesoperatinginKoreahaveearlierprovidedexperienceinglobaloperations.

SouthKoreaholdsgreatappealforothercountries',forinstance,investedinestablishingadrivingexperiencecenterinIncheonin2014,andinAprilthisyear,BMWinvestedanother12billionKRWtosetuparesearchcenterinKorea,makingitBMWGroup'sfifthglobalresearchbase.

ThismovepartlyreflectsBMW'sstrategiclayoutandconsiderationsfortheoverallAsianmarket,includingChina,Korea,'sdesiretomaintaincloserlinkswithecosystemcompanieslikeSamsungduringitsglobalizationprocess.

InadditiontoSouthKorea'sautomotive,shipbuilding,andconsumerelectronicsproducts,thecountryisincreasinglyinvestinginfuturehigh-manufacturingindustriessuchasbio-health,newenergy,smartvehicles,andsemiconductorsthroughhigh-manufacturing,aimingtocreatemorefutureglobalbrandsandconstructamorecomprehensiveglobalstrategiclayout.

Takenewenergyasanexample,SouthKorea',SouthKorea'%,anincreaseof38%,afterSouthKoreaintroducedpoliciesandbiddingtopromoteenergystorage,thenewlyaddedenergystoragecapacityreacheditshighestlevelsince2020.

,theSouthKoreangovernmentwasthefirstintheworldtoproposetheconceptofa"hydrogensociety,"developinggreenhydrogenproductiont,Kia,andLGhavealsolaunchedhydrogen-poweredcars/trucks/,thehydrogenenergyindustryinSouthKoreaandgloballystillfaceschallengessuchastechnologymaturity,storageandtransportation,andrelatedinfrastructure.

IntheDRAMchipsector,ntheworld,withaboutan11%shareoftheglobalfoundrymarketinthefirsthalfof2024,,theSouth()nextyear.

SouthKoreancompanies'globalizationinvolvesindustriallayout,technologicalinnovation,brandbuilding,marketing,andevenpolicysupportandindustryorientation,allofwhichareworthcarefulstudybyChinesecompanies.

SouthKorea'ssignificancetoChinesecompaniesliesnotonlyinthereferentialvalueofSouthKoreancompanies'earlierglobalizationprocessbutalsointhepotentialoftheregionalmarketandthepreferentialandconvenientconnectivityofSouthKoreatoglobaltrade.

AlthoughSouthKoreahasapopulationoflessthan60million,

Atthesametime,withthereversalofChina-SouthKoreatraderelationsandthetransformationofSouthKorea'shigh-manufacturingindustry,moreopportunitiesareemerging.

AccordingtoChina'scustomsstatisticsin2023,themaingoodsimportedfromSouthKoreaweremechanicalandelectronic/audio-visual/opticalmedicalproducts,primarilyintegratedcircuits,%,followedbychemicalandplasticrubberproducts(20.05%),metals(5.25%),andpetroleum,naturalgas,andothermineralproducts(3.16%).

Duringthesameperiod,China'smainexportstoSouthKoreaweremechanicalandelectronicproducts,includingintegratedcircuits(42.98%),chemicalandplasticrubberproducts,mainlylithiumbatteries(18.60%),metal-relatedproducts(10.19%),textiles,clothing,shoes,andhats(7.8%),andfurniture,lamps,andtoys(4.79%).

FromthecomparisonofChina-SouthKoreatrade,China'sdemandforKoreanproductsisrelativelyconcentrated,whileSouthKorea',thetradefocusisgraduallyshiftingtowardshighvalue-addedintermediatematerials,mainlysemiconductorsandlithiumbatteries,movingawayfromatradestructuredominatedbyrawmaterials.

ChinaisgraduallytransitioningfromthedownstreamofSouthKorea'smanufacturingindustrytothemid-to-upstream,drivingtheChina-Sounthefieldofpowerbatteries.

Ononehand,thereisfie'sSNEResearch,amongthetoptenglobalpowerbatteryinstallationsinthefirsthalfof2024,Chinesecompanieshold6positions,Koreancompanies3,andJapanesecompanies1,%,22.2%,%,inthefirsthalfof2023,SouthKorea'sdepenceonChinaforkeyrawmaterialsforpowerbatteriessuchaslithiumhydroxide,nickelsulfate,%,72.1%,and100%respectively.

Ontheotherhand,both,ChinesecompaniessuchasHuayouCobalt,GEM,andCNNChavesignedinvestmentcooperationagreementsworthhundredsofmillionsofdollarswithKoreancompaniestoproduceandprocessupstreamproductsneededforpowerbatteries,suchascathodematerials,precursors,andnickelrefining.

Additionally,inthepost-pandemicera,thecross-integrationofnew-generationinformationtechnologywithadvancedmanufacturing,newmaterials,a,experiencingasloweconomicrecovery,regardsthedigitaleconomyasanimportantstrategicleverforeconomicgrowthandisvigorouslypromotingthedigitaltransformationofindustries,developingmobiledigital,biopharmaceutical,s,includingsmartwork,homeoffice,andonlineeducation.

Toencouragethedevelopmentofdigitalinformationtechnology,theSouthKoreangovernmentofferspreferentialloaninterestratesanddividestheinformationandcommunicationindustryintothreemajorsectors:informationcommunication,electricalelectronics,,,%.

ManyChinesecompanieshavesensedcooperationopportunitiesandhavebecomeactiveininvestinginKorea.

Publicdatashowsthatsince2017,ChineseinvestmentinKorea'selectricalandelectronic,machineryandequipment,precisioninstruments,medicaldevices,metals,,aftertheRegionalComprehensiveEconomicPartnership(RCEP)cameintoeffectforKorea,ChinaandKoreahaveincreasinglycollaboratedintechnology-intensivefieldssuchasautomobiles,electromechanicalproducts,andchemicals.

RecentdatafromKorea'sMinistryofTrade,IndustryandEnergyshowsthatinthefirstthreequartersof2024,foreigndirectinvestmentinKoreatotaled$25.18billion,%,,investmentfromChinawas$4.57billion,%.

Atthesametime,withtheintensificationofSino-UStradefrictions,Koreahasbecomeanimportantglobaltradeandeconomictransithub.

LocatedatthecenterofNortheastAsia,connectingimportanthubsbetweenChina,Japan,SoutheastAsia,andNorthAmerica,KoreahassignedsuperFTAs(FreeTradeAgreements)with59countriesgloballyandhasthethird-largesttariffpreferentialcostadvantageintheworld,makingitoneoftheimportanttransshipmenttradelocationsforChinesecompaniestoaccesstheNorthAmericanmarket.

AsoneoftheKoreancitiesclosesttoChina,Incheonhasbecomethe"GoldenBridge"forChina-Koreaeconomicandtradeexchanges.

LocatedatthecentralpositionofNortheastAsia,IncheonisKorea'sthird-largestcityandthecenterofKorea'simportandexporttrade,accountingfornearly70%ofKorea''skeymanufacturingindustriessuchasautomobiles,shipbuilding,steel,metals,ports,andconstruction.

Incheonhoststwooftheworld'smajortransportationhubs,namelyKorea'ssecond-largesttradeport,IncheonPort,andKorea'slargestairport,IncheonInternationalAirport.

IncheonPortislessthan200kilometersawayfromWeihai,Shandong,,thefirstmaritimeroutebetweenIncheonPortandWeihaiwasestablished,andlaterthemaritimeroutesbetweenQingdao,China,andIncheondevelopedtoasmanyassix,makingIncheonPortaveritablemaritimelogisticschannelforChina-SouthKoreatrade.

IncheutalsotheNortheastAsiaregionalcenterfortheLondonMetalExchange,tradingmillionsoftonsofproductssuchascopper,aluminum,nickel,andsteelannually.

AccordingtodatareleasedbytheIncheonPortAuthority(IPA),thecontainerthroughputofIncheonPortreachedanewhistoricalhighin2023,,3.2%%respectivelycomparedtothepreviousyear.

IncheonInternationalAirportisanother"goldenbridge"forChina-SouthKoreatrade

Asthethird-largestcargoairportinAsia,followingHongKongInternationalAirportandTokyoNaritaInternationalAirport,itisacrucialav,includingIsraelAerospaceIndustries,AtlasAirfromtheUSA,andKoreanAir,promotingtheformationoftheIncheonaviationindustrycluster.

Itisalsoamajor"base"forChina'scross-bordere-commercelogistics.

AccordingtoSouthKorea'sChosunIlbo,alargenumberofChinesee-commerceproductsaregatheredatthelogisticscenterinWeihai,Shandong,andthenenterSouthKoreathroughwestcoastportssuchasIncheon,Pyeongtaek,andGunsan,'soverseasaircargovolume.

DatafromIncheonInternationalAirportCorporationshowsthatin2023,thetotalweightof"sea-airintermodalcargo"arrivingatIncheonAirportbyseaandthenairliftedtothirdcountriesreached98,560tons,%,99.6%originatedfromChina.

Inadditiontologistics,Incheonhasestablishedindustriesinthethreehigh-manufacturingsectorsthattheSouthKoreangovernmentiscontinuouslyinvestingin:bio-health,newenergyfuturevehicles,andsemiconductors.

IncheonisthecenterofSouthKorea'sbiopharmaceuticalindustry,leadingthecountry',themarketvalueofSouthKorea'sbiopharmaceuticalmarketreached25billionUSD,makingitanindispensablebiomanufacturingcenterintheglobalsupplychain.

DataindicatesthatIncheon','sbio-industryclusterisconcentratedinSongdo,whichcurrentlyhas11industrialparks,gatheringleadinglocalbiocompaniessuchasSamsungBiologics,LotteBiologics,Celltrion,andSKBiopharmaceuticals,aswellasglobalrawmaterialcompanieslikeMerck,Sartorius,Cytiva,andThermoFisherScientific.

Incheon'sphotovoltaicenergystoragebatteryindustrychainisalsoquitecomplete,coveringthedevelopmentofenergystoragetechnologies,includinglithium-ionbatteries,vanadiumredoxflowbatteries,andsodium-sulfurbatteries,aswellastheproductionandservicesofsupportingequipmentsuchasphotovoltaicmodules,inverters,andmountingsystems.

Recently,theIncheonCityGovernmentreleasedthe"IncheonFutureIndustryMap,"statingthatinthefuture,fourmajoradvancedindustrialbeltswillbeconstructed:a"Bio-Semiconductor-Materials,Parts,EquipmentBelt"inSongdo,Namdong,andYeongjong;a"Robotics-Mobility-AdvancedMedicalBelt"inCheongna;an"Eco-Frily-FutureEnergyBelt"inGeomdanandYonghyeong;andan"ICTConvergenceBelt"inJuan,Bupyeong,,thefoureconomicbeltsareexpectedtocreateamarketvalueof73trillionKRW().

AgainstthebackdropofadjustmentsintheChina-SouthKoreatradestructure,Incheonwilltakeonmoreresponsibilitiesforindustrialexchange,andmoreChinesecompaniesarebeginningtoestablishapresenceinIncheon,involvingsectorssuchaslogistics,newenergy,realestate,e-commerce,andretail.

Forexample,HongKong'sChowTaiFookGroupsubmittedaletterofintenttotheSouthKoreangovernmenttoestablishapresenceonYeongjongIsland,Incheon;AlibabaisalsonegotiatingwiththeIncheoncitygovernmenttoinvestinbuildingalargeshoppingcenter,hotel,logisticscenter,etc.,intheIncheonYeongjongIslandFreeEconomicZone;ChinaTravelServiceHongKongHoldingsandWeihaiBaimaYunWarehouseSupplyChainManagementCo.,;GanzhouCyclePowerTechnologyCo.,$87,400(approximately600,000RMB)tosetupanewsubsidiaryinIncheontoengageinlithiumbatteryrecyclingtechnologyservices,trade,andotherbusinesses;theMexicanChineseenterpriseQilinGrouponceco-investedwithIncheonCity,SouthKorea,tobuildthefirstChinesecommercialcityinSouthKorea—"IncheonChinatown"…

Thistime,theAsianFinGlobalBusinessLeadersClub,jointlyinitiatedbyTMTPostandtheAmericanAsianFin,willbeledbyrepresentativesofstarcompaniesinfourmajorfields:biotechnology,automotiveandautonomousdriving,cleanenergy,andsmartlogisticsfromChina,toengageintwo-waydeepexchangeswithrepresentativecompaniesinSouthKorea'sfourmajorfields.

Additionally,participantscanfullyengageinkeyactivitiesofIncheonTechWeek,exchangingwithdozensofSouthKoreanpolicymakersandleadersofkeyindustries;conductin-depthvisitstotheIncheonYeongjongLogisticsIndustrialPark,SongdoBioIndustrialPark,andSeoulPharmaceuticalBase,andengageindeepexchangesandlearningwithSouthKoreangiantssuchasSamsungBiologics,CJLogistics(underCJGroup,SouthKorea'slargestlogisticscompany),HyundaiGroup,aswellasglobalcompaniesestablishedinSouthKorea,toexploreglobalizationexperiencesanduncovercooperationopportunities.

(Author｜YangXiujuan,Editor｜WangLu)