The purpose of this study is to analyze whether or not China’s rapid economic growth and its membership in the WTO will impact its competitive relationship with Korea. The study also seeks to put forth recommendations for a corresponding strategy.
The U.S.-China Bilateral WTO Agreement signed on November 15, 1999, served as a new turning point for China in its accession to the WTO. Later, in May 2000, China and the European Union signed the bilateral agreement on China’s accession to the WTO. Following the successful settlement of remaining issues during the meeting of the Working Party in Geneva early July 2001, China finally joined the WTO in December the same year, just after the launch of the Doha Round. China’s accession to the WTO is expected to bring about enormous changes to the overall economic situation in China, trade and industrial structure, and Chinese foreign policy. This is also likely to significantly affect the reform and openness policy that China has pushed forward for the last 20 years.
However, it is difficult to say if China’s speedy industrialization and accession to the WTO will dramatically deepen the competitive relationship between Korea and China in a short term. Considering the present relations of industrial competition between the two nations, Korea has a relatively stronger competitive strength in the heavy chemical industry, whereas China has the advantage in the light industry. This points to a certain level of complimentary – perhaps more so than confrontational – relations between the two nations. When viewing the export structures by industrial items of the two nations, the proportion of exported goods with Korea’s competitive edge accounted for 58.9%. The proportion of items that both nations produced and competed in the market with accounted for only 17.1%. Even after adding the proportion of items with China’s competitive edge (6.9%), the total proportion of Chinese exported goods reached only 24%, meaning it was not likely that the Chinese economy would outpace the Korean economy in the short term. However, China’s membership in the WTO is expected to serve as a catalyst to streamlining and reforming China’s economic systems and industrial structures. As a result, in the long term, China’s economic conditions will improve, and the industrial structure of the two nations will become similar, intensifying the competitive dynamics between Korea and China.
In this regard, Korea needs to anticipate the challenges of this competitive relationship by putting forth measures to enhance its competitiveness. These measures must address specific markets, including the global, Chinese and Korean markets, as well as include strategic excecution of each. China’s economic growth is expected to continue for some time to come, and Korea should maximize on this by using China’s economic growth as an opportunity to strengthen its own economy.
중국의 WTO 가입을 계기로 본 한 중 간 주요 산업의 경합 및 보완관계(China’s WTO membership and an analysis of the industrial competitiveness of Korea and China)
서울 : 한국개발연구원
|Series Title; No||정책연구시리즈 / 2001-06|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Trade|
|Holding||한국개발연구원; KDI 국제정책대학원|