Competition and Complementarity in Component and Material Industries between Korea, China and Japan

Since the global financial crisis, the East Asian countries’statuses in the global economy have improved, and the business environment for component and material industries has rapidly changed. In particular, interest in the specialization structure in component and material industries among Korea, China, and Japan has been heightened through recent discussions on the formation of a free trade agreement (FTA) among the three countries. A new aspect of the specialization structure in component and material industries among the three countries has been taken on due to conflicts including the rapid growth of China, the catch-up effort of Korea, and the high value-added strategy of Japan. Basically, the relationship in component and material industries among Korea, China, and Japan are complementary as well as competitive. This study, therefore, aims to analyze the competition and complementary relationship in component and material industries among Korea, China, and Japan and to find implications on policy suggestions for the Korean government to support component and material industries. For this study, various research methodologies including literature reviews, statistical analyses, and expert interviews have been employed. Changes in specialization structure in component and material industries among Korea, China, and Japan are reviewed, and existing states and issues in major component and material industries of the three countries such as LCD, automobile parts, and steel industries are analyzed. Finally, several Korean policy suggestions are provided in order to promote specialization among the three countries in component and material industries