[Beijing Diary] Industry-Academia-Research Warning: "It's Not the Time to Ignore China"

"This is not the time to blindly disregard China's achievements. The validity period of the Korea-US-Japan cooperation cannot be guaranteed, and the US and Japan are still maintaining behind-the-scenes contacts and cooperation with China. We also need to objectively assess the Chinese market and carefully consider the various situations that may arise afterward."

These are the words of Mr. A, an executive of a large corporation with over 10 years of experience working in China, whom I met recently. The remarks from industry, academia, and research professionals active in China recently all shared this context. It is not just that Korea is underestimating its relationship with China, but there is concern over Korea turning its back as if never to look back again.

[Image source= Xinhua News Agency]

In the past, China erected a wall against Korea with the baseless "Hanhanryeong" (Korean Wave ban), but Korea now has a blurred perspective due to unfounded disregard and disparagement. While the Hanhanryeong mainly affected the limited markets of Chinese culture and tourism, the blurred view of China's technological rise is worrisome because it ultimately causes us to miss the optimal timing for our own industrial strategies and policies.

Korea's lost sense of reality regarding China's advanced technology industry is a prime example. At the 'China Advanced Technology Competitiveness and Future Strategy Seminar' hosted by the Korea-China Science and Technology Cooperation Center (KOSTEC) held on the 19th at the POSCO Building in Beijing, quite meaningful discussions emerged. Among them, the presentation by Professor Kim Jong-myung of the Department of Chemistry at Shanghai University of Science and Technology, titled "China's Secondary Battery Industry Creating New Trends," was particularly impressive.

Although lithium iron phosphate (LFP) batteries were once considered "cheap" in Korea due to their low energy density despite price competitiveness, they have rapidly risen in the secondary battery market since the 2020s. China, which has steadily focused on LFP battery-related technology and basic research since the early 2010s, has now dominated the related market based on abundant phosphate and iron raw materials. Consequently, Korea's three secondary battery companies?LG Energy Solution, SK On, and Samsung SDI?have belatedly started their pursuit, aiming for mass production by 2026.

The semi-solid battery, which was evaluated as inferior in performance compared to solid-state batteries, is similar. Companies such as Weilan New Energy Technology, Ningde Times (CATL), and Ganfeng Lithium have been competing since last year to achieve results like electric vehicle installation and condensed battery production. LG Energy Solution announced the establishment of an energy plant in Ochang, Chungbuk, and plans commercialization by 2026. The rapidly emerging sodium-ion battery is following a similar path. Although it is inexpensive and highly stable, its low energy density and large volume have led the Korean industry to still underestimate and overlook its potential and reality.

Professor Kim explained, "Although this is a story from one or two years ago, Korea has shown a somewhat cynical attitude toward the potential and achievements of sodium-ion batteries," adding, "However, global market demand is rapidly increasing." He predicted, "Out of 20 factories worldwide, 16 are in China, and within two years, China will occupy 95% of the global market." However, he cautioned, "This does not mean Korea should immediately enter the sodium-ion battery market or that companies should rush to invest and commercialize. We need to accurately diagnose China's market situation and achievements first, then formulate our strategy."

He emphasized, "Realistically, it is difficult to find cooperation possibilities between the two countries in the secondary battery market, and domestic demand in China will not be high due to a high localization rate. However, considering that the secondary battery field was one where Korea was caught off guard and is now chasing, research on what is happening in China and how far it has progressed is necessary."

Recently, businesspeople visiting China out of necessity tend to keep it quiet and avoid publicizing meaningful achievements. One institution head pointed out, "In the past, I went to the airport so often for ministerial-level protocol that the doorsteps wore out, but recently, I don't even remember the last time I went to the airport," adding, "Honestly, there is almost no high-level exchange to the extent that it makes you wonder if this is acceptable." Large-scale corporate facility investments, personnel exchanges, and market exploration surveys have practically come to a halt. It is time to seriously listen to the industry's complaints that they are uncomfortable both internally and externally, having to watch their step due to government scrutiny in a market already struggling with competition and overproduction.