[경제를 보다]이재용·최태원 중국 방문 이유는? | 뉴스A 라이브

In the world of business and economics, the relationship between countries can have a profound impact on industries and companies. Korea, a prominent player in the global market, has recently been experiencing a rollercoaster ride in its economic ties with China. In this article, we will explore the contrasting actions of two Korean giants, Samsung and SK, and their leaders' visits to China. Let's dig deeper into this curious case.

The Power Play in China

It all began when Lee Jae-yong, the chairman of Samsung Electronics, attended a high-level forum on development in China. This forum, organized by the Chinese State Council's think tank, was a gathering of global leaders from companies like Apple and Pfizer. Lee Jae-yong had the opportunity to meet with Li Keqiang, the Premier of the State Council, along with other business leaders.

On the other hand, Choi Tae-won, the chairman of SK Group, attended the Boao Forum for Asia, often referred to as the "Asian Davos." The forum, held in Boao, China, attracts influential figures from various sectors. While Lee Jae-yong chose to visit a Samsung subsidiary in China, Choi Tae-won engaged in a signing event and took selfies with fans at an Apple store in Beijing.

Divergent Paths, Divergent Markets

The different actions of these leaders can be attributed to the unique circumstances each company faces in the Chinese market. Apple currently holds the top spot in the Chinese smartphone market, with a market share of 22% in the fourth quarter of last year. Moreover, the Foxconn factory in Zhengzhou, China, is Apple's largest manufacturing base. Therefore, it makes sense for Tim Cook, Apple's CEO, to cultivate relationships with Chinese consumers and fans.

Samsung, on the other hand, has a much smaller market share in China, sitting at just 2% in 2020. Furthermore, the recent restrictions on Chinese investments in advanced technologies, coupled with the US semiconductor subsidy, have affected Samsung's operations in China. However, Samsung and its subsidiary, SK Hynix, still play a crucial role in the Chinese market, accounting for 40% of the NAND flash and DRAM production, respectively.

From Trade Surplus to Trade Deficit

China has been Korea's largest trading partner for many years. However, the tables turned in 2021 when Korea recorded its largest trade deficit with China. The accumulated trade deficit from January to February reached over 6 trillion won ($5.7 billion). The decrease in semiconductor exports, influenced by China's sluggish economic growth of 3% in 2020, was a significant contributing factor.

Moreover, the skyrocketing prices of battery raw materials increased Korea's import costs, further exacerbating the trade imbalance. The fundamental issue lies in the increasing competitiveness of Chinese industries, particularly in intermediary goods like plastics, rubber, and leather. As China's financial resources and capabilities have grown, their influence on Korea's exports has become more pronounced.

The Opening That Brings Few Fruits

Despite China's reopening after COVID-19-induced restrictions, Korean experts are skeptical about the benefits Korea can reap. The return to normalcy has not been kind to Korea's market position in China. The initial downturn due to the THAAD missile crisis had not yet recovered when the COVID-19 pandemic hit, crippling industries like cosmetics, which had hoped for market share recovery.

All these factors have led experts to conclude that, despite China's reopening, Korea may not enjoy significant gains. It is a complex economic dance between the two nations, with Korea struggling to keep up with China's industrial advancements.

The Key Takeaway

The story of Korean companies in China is a fascinating case study of how economic relationships can sway the fortunes of businesses. The contrasting actions of Samsung and SK leaders illustrate the unique challenges and opportunities each company faces in the Chinese market. As the global economic landscape continues to shift, it will be intriguing to see how Korean companies adapt and thrive amid China's rise as a global economic powerhouse.