KIET: China Leads Korea in Robots, EVs, and Batteries

Publication of the report "Competitiveness Analysis and Policy Directions for Advanced Industries in Korea and China"
"Need to move beyond the super-gap toward a K-Manufacturing model and a new China strategy"

The Korea Institute for Industrial Economics and Trade (KIET) has released an analysis showing that China’s competitiveness in advanced manufacturing sectors such as robots, electric vehicles (EVs), and batteries is ahead of Korea. The institute suggests that Korea needs a new industrial strategy that goes beyond a simple "super-gap strategy" and simultaneously pursues both competition and cooperation with China.

In its report released on February 24 titled "Competitiveness Analysis and Policy Directions for Advanced Industries in Korea and China," KIET analyzed that "China is rapidly securing technological competitiveness across advanced manufacturing, including robots, electric vehicles, batteries, and AI semiconductors, and is emerging as a global manufacturing powerhouse."

According to the report, in robots, semiconductors, electric vehicles (including autonomous driving), and the battery industry, which are key sectors under the "Made in China 2025" strategy, the localization rate of core parts and equipment has risen since 2015, and in some areas China’s global market share has expanded. Overall competitiveness is strengthening. In particular, in new industries such as AI-based manufacturing, autonomous driving, and humanoid robots, China is assessed to be enhancing both technological capabilities and market dominance through rapid demonstration and industrial diffusion.

Based on a comprehensive evaluation of competitiveness across value chains using expert surveys and focus group interviews (FGIs), the study found that, except for semiconductors, China holds an advantage over Korea in robots, electric vehicles, batteries, and autonomous vehicles.

For industrial robots, Korea was slightly ahead in product development and design capabilities, but China had the upper hand in procurement, production, and overseas market creation, leading to an overall competitiveness advantage for China. In electric vehicles as well, China showed superiority in most areas except for overseas market creation and battery services, where Korea retained some strengths. For autonomous vehicles, China was dominant across the entire value chain.

In semiconductors, the analysis showed a "head-to-head competition" pattern, with strengths and weaknesses mixed across detailed segments. Experts largely agreed that while Korea maintains a strong position in memory, China’s competitiveness is relatively higher in non-memory areas such as AI chip design.

The report diagnosed that China’s price competitiveness and its expanding AI-based dominance in new markets are acting as common threat factors across Korean industries. However, it also assessed that, amid containment policies against China by advanced economies such as the United States and the European Union, there are opportunities for differentiation focused on premium markets. The analysis suggests that Korea can target high value-added markets by leveraging its accumulated technological capabilities and trusted quality across products, materials, and components.

The report recommended that Korea should build an independent "K-Manufacturing Model" that goes beyond the existing simple super-gap strategy. Through a Manufacturing AI Transformation (M.AX) strategy, Korea should discover Korea-specific specialized technologies across the entire value chain linking materials, parts, and finished products, and take the lead in building trust-based global supply chains.

The report also emphasized that China should not be viewed merely as a follower or competitor. Instead, Korea should closely analyze value chains by industry to secure technological superiority, while at the same time seeking ways to tap into demand within China and pursue strategic cooperation. It explained that a "competitive cooperation" approach, which strategically utilizes China’s advanced industries and technology ecosystem, is necessary.