K.E.Y. PLATFORM 2023
Time for “K-Branding” – Made in China is Fading; Made in Korea is Getting More Versatile
Wolf Warrior is limping from its exhausting competition for supremacy with the US
The global economy is facing an unprecedented complex crisis, but we can hardly expect to see a savior coming to rescue again. China served as a savior for the world economy during the global financial crisis more than a decade ago but is now considered as one of the biggest sources of instability. The Chinese economy has deteriorated in the aftermath of the COVID-19 pandemic while the country was challenging the US for supremacy, triggering fears of a "global economic and security crisis originating from China".
In fact, China is in a difficult situation to complete its “Rise of Semiconductor” and “Rise of Industry” strategies due to the US regulations on advanced technologies. In addition to chronic problems such as the real estate bubble and accumulated debts, its rigid "Zero COVID" policy led to an economic growth of only 3.0% last year. This is the second lowest figure since the Cultural Revolution of the 1960s to 1970s. Although China switched to the “living-with-COVID” policy at the end of last year under the pressure of “white-paper protests,” the largest political protest since the Tiananmen Square protests in 1989, the process of economic reopening is expected to be tough amid warnings of another surge between March and May 2023.
The global experts interviewed by the 2023 K.E.Y. Platform Special Coverage Team since the beginning of the year have also mentioned the possibility that China's economic decline will become a clear trend and, as a result, may bring the US-China competition for hegemony closer to an end. The population growth, which has been one of the growth engines of the Chinese economy, also fell from its peak and made a negative growth last year. Decreases in the economically-active population, coupled with the impact of long Western economic sanctions, could lead to a period of decline in the Chinese economy. There are also fears that when push comes to shove, China might turn to a military provocation such as an invasion of Taiwan, driving the US-China confrontation to a very dangerous point.
The void left by China could be an opportunity for Korea to expand its export territory
With the global economy in a difficult situation, the declining economy of China, one of our key trading partners, certainly poses a complicated concern for us. However, it is not something to just sit and worry about, nor something to wait and see with the old "tightrope diplomacy" approach. Now that a tectonic shift has occurred, we must throw the old map away and create a new map to go out into the world that has already changed. We could take over the land that China has been pushed out of.
In fact, in terms of supply chain, the US blockade has prevented high-tech industrial equipment from entering China, so it will take a little longer for China to catch up with our technology and industry. We have earned time. The consumer market is also showing signs of change. China is already losing ground in the US import market amid US-China trade tensions and competition for supremacy. Chinese brands are dropping in value. This trend is likely to spread across the United States and other leading markets. The void left by China could be an opportunity for the Korean economy and businesses.
In the future, we need to expand our economic territory by discovering and developing Korean brands (“K-brands”) not only for existing major export products such as IT products and automobiles but also small and medium-sized consumer goods such as cosmetics, clothing, and food and entering them into major markets including the US. Unlike Korea’s traditional export items, consumer goods enable flexible access and quick entry into almost any country. It is a good area for Koreans – with their excellent flexibility and speed – to demonstrate their capabilities.
Thanks to increasingly-popular “K-contents” including K-pop and K-movies, the world’s perceptions of Korean consumer goods will get better day by day. You can see opportunities opening up for “Made in Korea” and “Designed in Korea” to play an active role in the global consumer market. Now is the time for “K-Branding”.