Strategic Directions by Sector
- (Consumer Goods) Leverage China’s domestic consumption stimulus policies and regional development strategies to target new consumer segments and untapped markets.
- (Digital Transformation) Focus on strategic partnerships centered on China’s “New Infrastructure” (New SOC) initiatives across seven key sectors.
- (Green Revolution) Expand entry into industries tied to clean energy and carbon neutrality goals.
- (GVC Integration) Participate in supply chain development for industrial upgrading and pursue mutual growth through technology cooperation.
1. SWOT Analysis & Strategic Framework
Strengths (S)
- Continued preference for Korean products with a premium image
- Competitive advantage in sectors like semiconductors and healthcare
- Strong capabilities in services and content industries
- Rich experience and know-how from prior investments in China
Weaknesses (W)
- Insufficient localization in product development and marketing tailored to Chinese trends
- Continued reliance on low value-added intermediate goods exports
- Growing brand power and market share of Chinese local brands
- Dependence on Korean Wave (Hallyu) for market access
Opportunities (O)
- Accelerated shift toward a digital and green economy
- Strengthened domestic consumption and regional balance policies
- Ongoing trade liberalization via RCEP, Korea-China FTA
- Favorable climate surrounding the 30th anniversary of Korea-China relations
Threats (T)
- Ongoing risks from prolonged US-China trade tensions
- Increased market regulations and restrictions on foreign firms
- Push for supply chain diversification and self-reliance
- Unstable supply conditions due to power shortages and rising raw material costs
Strategic Directions
SO Strategy (Leverage Strengths & Opportunities)
- Utilize China’s domestic demand stimulus policies to boost Korean exports
- Expand into less saturated inland and underdeveloped regions benefiting from balanced development policies
- Develop targeted approaches to segmented consumer groups by income and region
ST Strategy (Leverage Strengths to Tackle Threats)
- Target emerging demand in China’s New Infrastructure sectors (5G, EV charging, big data centers, AI, etc.)
- Expand into new growth industries aligned with China’s Digital New Deal
- Strengthen project-based and tech-focused cooperation across all areas of the Fourth Industrial Revolution
WO Strategy (Use Opportunities to Address Weaknesses)
- Increase investments in eco-friendly industries in response to China’s carbon neutrality goals
- Tap into rising demand for alternative energy solutions and related technologies
- Launch initiatives linked to Green New Deal and ESG
WT Strategy (Defensive Positioning)
- Join China’s efforts to restructure and localize global value chains (GVCs)
- Exporters and local Korean businesses should prepare for risks from power constraints and commodity price volatility
- Promote entry into core materials, parts, and equipment (so-called “materials-parts-equipment” or “so-bu-jang”) sectors aligned with GVC realignment
2. Industry-Specific Entry Strategies
To respond to evolving global business trends and China’s changing growth paradigm, Korean firms must explore new business models and opportunities.
[Targeting the Domestic Market]
- (Domestic Expansion) Tailor strategies to various consumer segments and regional markets.
- Respond to China’s diversified consumption structure by customizing outreach to distinct consumer groups.
- Understand regional market distribution networks and consumer behaviors for localized market entry.
- Leverage digital platforms, live commerce, and O2O (online-to-offline) integrated marketing strategies.
[Expanding in Advanced Industries]
- (Future Industries) Accelerate entry into new growth sectors tied to the Digital New Deal.
- Proactively respond to demand for collaboration in future-oriented digital industries.
- Actively promote private-sector-led projects and make use of China’s pro-foreign business stance.
- Coordinate with regional industry hubs and flagship companies involved in New Infrastructure projects.
[Strengthening Green Industry Collaboration]
- (Green Revolution) Launch ESG-linked business initiatives aligned with the Green New Deal.
- Participate in G2G collaboration projects for carbon neutrality, co-develop core technologies, and supply equipment.
- Monitor regulatory shifts in environmental standards and respond promptly.
[Adapting to Global Value Chain Changes]
- (GVC Strategy) Expand into parts, materials, and technology cooperation sectors.
- Invest in diversifying parts supply and support China’s move toward self-reliant supply chains.
- Explore opportunities in robotics, machinery, future mobility, and other high-demand component sectors.