KOTRA Discusses '4 Major Strategies' to Target Chinese Market: "Let's Seize the Opportunity of GVC Restructuring"

Held Online Trade and Investment Strategy Meeting for China Region on the 30th of Last Month

KOTRA held an online trade and investment strategy meeting for the China region on the 30th. Kwon Pyung-oh, President of KOTRA (right), is seen presiding over the meeting. Photo by KOTRA

[Asia Economy Reporter Kim Ji-hee] "Let's quickly detect local changes in China to prepare for the post-COVID era and leverage them as business opportunities."

KOTRA held an online China regional trade and investment strategy meeting on the 30th of last month and announced on the 1st that it discussed four major strategies to target the Chinese market in the second half of the year. In May, China announced a super stimulus package worth 8.5 trillion yuan (approximately 1,500 trillion KRW) at the Two Sessions, its largest political event. This meeting was held based on the judgment that China's strategy to revive growth momentum and secure future drivers could become an export opportunity for Korean companies.

The core of the four major strategies discussed at the meeting includes ▲untact marketing utilizing China's consumption stimulus measures ▲entry into intermediate goods amid the reorganization of the global value chain (GVC) ▲Korea-China corporate cooperation linked to China's industrial policies ▲and demand-tailored investment attraction.

Regarding untact marketing, KOTRA established K-Studio at six Chinese trade centers in April. K-Studio is a permanent business space for digital marketing such as video consultations and Wanghong live broadcasts, allowing not only consumer goods but also intermediate goods companies such as materials, parts, and equipment to communicate online with local buyers. The Chinese trade centers have set a goal to support 1,000 domestic companies to transition into export companies.

KOTRA is also accelerating export support in the intermediate goods sector in line with the GVC reorganization. Among KOTRA's emergency marketing contracts in the China region in the first half of this year, 80% were intermediate goods such as automotive parts. KOTRA is expanding its global partnering business from focusing on automotive and shipbuilding equipment to the aviation, home appliances, machinery, and semiconductor sectors. For technology-intensive industries, it plans to promote reshoring to create stable production conditions by process and contribute to domestic job creation.

Attention is also being paid to China's industrial development strategy. The seven new SOC sectors proposed by the Chinese government include 5G, AI, industrial internet networks, big data, ultra-high voltage equipment, high-speed rail and rail transit, and electric vehicle charging stations. KOTRA plans to analyze these industries and create entry opportunities for Korean companies.

According to the World Economic Outlook report recently revised by the International Monetary Fund (IMF), China's economic growth rate is expected to be 1% this year, the only positive growth among major countries. Kwon Pyung-oh, President of KOTRA, urged, "Let's make the Chinese market, which is recovering the fastest from the impact of COVID-19, our breakthrough for exports."