South Korea and China Reassess Economic Cooperation Amid Evolving Industrial Landscape
South Korean President Lee Jae-myung indicated during an interview with China Media Group (CMG) that China has achieved parity or superiority over South Korea in various technological and capital sectors. This development, he noted, is influencing the foundation of bilateral economic cooperation. President Lee's statement precedes his official visit to China, which is scheduled to include a delegation of approximately 200 South Korean company representatives. The visit occurs amid growing industrial competition between the two nations, specifically within the automotive and electric-vehicle industries.
Shifting Cooperation Dynamics
President Lee observed that historical economic cooperation between China and South Korea was structured vertically, with South Korea contributing advanced technology and capital, and China providing labor. He stated that China's economic advancement has transformed this dynamic, suggesting a requirement for a more balanced, horizontal cooperation model. Lee proposed that future collaboration should concentrate on advanced sectors such as artificial intelligence and high-technology industries, which are increasingly intertwined with automotive manufacturing and vehicle software development.
Sector-Specific Developments
Automotive Sector
The automotive sector exemplifies these evolving dynamics. China has become the world's largest producer and exporter of new energy vehicles. Concurrently, South Korea maintains a significant role in global automotive manufacturing, power electronics, and battery supply chains. Chinese automotive manufacturers have increased exports and expanded international market access in recent years. Simultaneously, South Korean manufacturers continue to utilize China as a substantial production base and market for vehicles and components.
Battery Supply Chains
Battery supply chains constitute a central area of both competition and interdependence. Chinese companies hold a substantial position in global lithium iron phosphate (LFP) battery production and manage significant portions of upstream processing for lithium, cobalt, and graphite. South Korean firms remain key suppliers of ternary lithium batteries to global automakers, including Hyundai Motor Group. These firms are experiencing increased competition from Chinese alternatives, particularly as electric vehicle adoption expands.
Vehicle Software and Intelligent Systems
In vehicle software and intelligent driving systems, competitive distinctions are becoming less pronounced. Chinese automakers have increased the implementation of advanced driver-assistance systems, in-vehicle operating systems, and artificial intelligence-based functions across their mass-market models. South Korean manufacturers are increasing investments in software-defined vehicles, autonomous driving research, and artificial intelligence to maintain market competitiveness.
Trade and R&D Trends
Trade data and industry reports indicate an increase in Chinese vehicle exports to South Korea. Concurrently, South Korean parts suppliers are experiencing increased competition from Chinese component manufacturers in sectors such as electric motors, power electronics, and battery materials. South Korean automakers are also expanding research and development investments in electrification and intelligent vehicles.
President Lee affirmed the deep integration of industrial supply chains between China and South Korea and emphasized the importance of avoiding confrontation in economic relations. His visit includes scheduled meetings with Chinese leaders and business representatives. Discussions are anticipated to cover cooperation frameworks in advanced manufacturing, including the automotive and new energy industries.
The visit occurs as both nations adjust industrial strategies amidst competition in electric vehicles, batteries, and intelligent automotive technologies.