South Korean exporters are likely to benefit from rising opportunities in China due to diverse government policies this year, a report suggested Monday.
According to the report on China’s six major policy directions and implications released by the Korea International Trade Association’s Institute for International Trade, China’s economic growth rate in the first quarter was minus 6.8 percent, down 12.8 percent from the previous quarter.
To revive the economy, the Chinese government proposed an economic stimulus package of 6.35 trillion yuan ($897 billion), including the expansion of fiscal deficits and the issuance of special bonds, last month.
It also set six policy directions for the following half, which include supporting small and medium-sized enterprises, innovating markets and governments, partnering with overseas countries, stabilizing employment and managing the environment and energy.
KITA suggested Korean companies revise their strategies of entering China based on a close review of the six policy directions under China’s low or negative growth this year.
“E-commerce and online-to-offline consumption are coming to the fore (in China) in the wake of coronavirus and the (Chinese) government is implementing policies such as global e-commerce and expansion of free trade test zones,” said Park So-young, a senior researcher at KITA’s Institute for International Trade, in the report.
“(Korean companies) should take this opportunity to focus on expanding to the (Chinese) market through e-commerce channels.”
The Chinese government’s active support is expected to accelerate the development of data economy-based manufacturing innovation and convergence services.
Korean firms should be prepared for high competition with Chinese firms, especially in data-based living services and health care, the report said.
“China’s strengthening research and development on the 5G network services, artificial intelligence and big data can intensify competition in the global market. But, it will also serve as an opportunity for Korean firms to take part in projects or enter new markets such as smart cars and smart home appliances.”
There are also things Korean firms should be careful about, the report said.
The Chinese government’s protection of intellectual property rights for Chinese companies overseas is being strengthened as global technical cooperation rises.
“More attention should be paid to timely registration and management of trademarks and intellectual property rights when carrying out joint projects with Chinese firms and exporting related products.”
By Shin Ji-hye (email@example.com