South Korea Ranks Third in The World in Terms of Manufacturing Competitiveness
Market News

South Korea Ranks Third in The World in Terms of Manufacturing Competitiveness

The United Nations Industrial Development Agency (UNIDO) announced the July 2020 World Manufacturing Competitiveness Index (CIP) which is based on 2018 indicators. South Korea ranks third after Germany and China among 152 countries in the world. CIP is a composite index of 8 items including per capita manufacturing, value-added, and manufacturing export value. It reflects the overall competitiveness of the manufacturing industry in each country. UNIDO publishes the CIP every other year.
Published: Jun 08, 2021
South Korea Ranks Third in The World in Terms of Manufacturing Competitiveness

Korea Manufacturing Competitiveness

According to the "Korea Manufacturing Competitiveness" report issued by the Korea Industrial Research Institute, South Korea, which ranked 17th in 1990, continued to rise in rankings, surpassing the United States and Japan for the first-time last year, and leaping to third in the world. According to the analysis, South Korea’s manufacturing industry has played a pillar role in economic growth and stable employment throughout the COVID-19 crisis. After the manufacturing industry’s contribution to economic growth plummeted to -1.6% in the second quarter of last year, it was -0.2% in the third quarter and 0% in the fourth quarter. The service industry was -0.8% in the third quarter of last year and -1.0% in the fourth quarter. Among 28 major countries, South Korea, which has the second-highest share of manufacturing, ranked fourth in terms of growth rate reduction compared to 2019. Before the crisis, South Korea ranked sixth among 28 countries in terms of increase in the unemployment rate. The world economy last year had a growth rate of -3.3%, but South Korea’s was -1.0%, due to the strong performance of South Korean manufacturing.

Driven by its strong manufacturing industry, South Korea now ranks fourth in economic performance among the 28 major economies, and sixth from the bottom in terms of the unemployment rate increase. The contribution of manufacturing to economic growth has surpassed the traditional growth engine of the service industry for two consecutive quarters. As the domestic epidemic continues to fluctuate, it is difficult for domestic demand to drive economic growth. Fortunately, the manufacturing industry has maintained a good momentum, and the large increase in exports has driven the overall South Korean economy from negative to positive. South Korea’s recent surge in exports is mainly due to some of its main industries such as semiconductors, liquid crystal displays, and petrochemicals, which maintain the highest competitiveness in the world. Most of South Korea’s main industries are highly integrated into the international industrial chain, and will need to place great importance on the possibilities and future direction of the global industrial chain restructuring brought about by the technological competition between China and the United States, and respond by diversifying their international market strategy and improving industrial competitiveness.

Overview of South Korea's imports and exports in December 2020

The Ministry of Trade, Industry, and Energy of Korea announced the "Import and Export Trends for the Whole Year of 2020 and December". South Korea’s exports for the whole year of 2020 was approximately US$512.8 billion, a decrease of 5.4% from 2019, and the value of imports was approximately US$467.2 billion. The U.S. dollar decreased by 7.2% from 2019, and the trade surplus was approximately 45.62 billion U.S. dollars, maintaining a surplus for 12 consecutive years.

The Ministry of Trade, Industry, and Energy cited WTO statistics for January to October 2020. Although South Korea’s exports declined by 8.2% in 2020, it still ranks 4th among the world’s top 10 major exporting countries in terms of export growth rate. There were only 4 countries with single-digit growth or decline. Hong Kong’s exports grew by 0.9%, China grew by 0.4%, the Netherlands fell by 7.4%, and South Korea fell by 8.2%. Belgium fell by 10.0%, Germany fell by 10.4%, Italy fell by 11.3%, Japan decreased by 11.7%, the United States decreased by 14.5%, and France decreased by 17.7%.

Among the 20 major export items of South Korea in 2020 (customs clearance statistics from January 1 to December 31), compared with 2019, there was a 57.2% increase in computers, a 54.4% increase in biotechnology and health care and a 15.7 increase in cosmetics. Exports in semiconductors increased by 5.6%, agricultural and aquatic products increased by 4.5%, batteries increased by 1.3%, home appliances increased by 0.7%, and plastic products increased by 0.03%. Items that saw reductions in exports included precision chemical raw materials which decreased by 0.4%, ships decreased by 2.0%, robots decreased by 3.4%, wireless communication equipment decreased by 6.1%, general machinery decreased by 8.8%, monitors decreased by 12.2%, automobiles decreased by 13.1%, textile fibers decreased by 13.2%.  steel decreased by 14.4%, petrochemicals decreased by 16.4%, auto parts decreased by 17.2%, and petroleum products decreased by 40.7%.

As for Korea’s major export regions (customs clearance statistics from January 1 to December 31), compared with 2019, the only major regions that saw increases in exports in 2020 were the United States and Vietnam with 1.1% and 0.8% increases respectively. Exports to the European Union (EU) decreased by 1.2%, to China decreased by 2.7%, to ASEAN countries decreased by 6.3%, to Japan decreased by 11.8%, to CIS decreased by 15.3%, to the Middle East decreased by 16.9%, and to Central and South America decreased by 25.9%. 

As for the import situation in 2020, the import of capital goods and consumer goods increased by 14.5% and 0.6% respectively, while the import of intermediate goods and raw materials decreased by 6.1% and 26.6% respectively. Among the main energy resource items, the import of gas decreased by 21.7% from the previous year, petroleum products decreased by 26.9%, coal decreased by 33.2%, and crude oil decreased by 36.7%.

Among South Korea’s 20 major export items in December 2020, compared with December 2019, shipping growth was 105.9%, biotechnology health care growth was 104.4%, wireless communication equipment growth was 39.8%, semiconductor growth was 30.0%, displays 28.0%, Home appliances 23.4%, robots 20.9%, cosmetics 16.8%, auto parts 15.6%, plastic products 15.3%, computers 14.7%, fine chemical raw materials 14.1%, agricultural and fishery food 11.2%, storage batteries 7.6%, textile fiber 2.9% and general machinery 2.8%. Petrochemical exports showed a decrease of -1.6%, automobiles -4.4%, steel -7.8% and petroleum products -36.5%. In terms of major export regions, compared with the same period last year, exports to Vietnam increased by 35.8%, exports to the European Union (EU) increased by 26.4%, exports to Central and South America increased by 20.1%, and exports to ASEAN countries increased by 19.6%. Exports saw an increase of 16.8% to India, an increase of 11.6% to the United States, an increase of 3.3% to China, and an increase of 1.4% to Japan. In contrast, exports to CIS decreased by 5.5% compared with the same period last year, and exports to the Middle East decreased by 33.1%.

In terms of import items, the imports of capital goods, consumer goods, and intermediate goods in December 2020 increased by 23.3%, 9.1%, and 4.1% respectively from the same month last year, while imports of raw materials decreased by 21.5%. Provisional customs clearance statistics show imports of major energy resources decreased compared with the same month last year. Gas decreased by 28.0%, coal decreased by 31.8%, crude oil decreased by 35.4%, and petroleum products decreased by 56.3%.

According to the Minister of Korea’s Ministry of Trade, Industry and Energy, Sung Yoon, South Korea’s exports in December last year maintained a record growth. Total exports and daily average export value have continued to increase for two consecutive months. The export value in December exceeded US$50 billion for the first time in 25 months, showing an increase rate in the double digits. Minister Cheng pointed out that although South Korea’s exports in 2020 were affected by external environment factors such as the Covid epidemic, the spread of trade protectionism, and the decline in oil prices, every time it faces a crisis, South Korea can rely on the competitiveness of its manufacturing industry, the efforts of export manufacturers, and the active support of its government. The cooperation between the private sector and the government, such as measures to improve export vitality, has helped South Korea successfully overcome difficulties.

South Korea’s exports last year were affected by the decline in global trade and the economic recession of major countries. In the second quarter, exports had severely declined by about 20% and faced a crisis. However, due to the government’s efforts to promote export recovery, exports in the fourth quarter and the second half of the year resumed growth for the first time in two years. In addition, the export of high value-added products such as system semiconductors, OLEDs, virus detection kits, and environmentally friendly automobiles has set a new historical record. The proportion of exports from small and medium-sized enterprises has increased. Consumer goods such as cosmetics, and agricultural and aquatic foods manufactured by small and medium-sized enterprises are at their highest levels. South Korea’s export outlook is expected to be optimistic. However, uncertainties such as the spread of the Covid epidemic, US government policies, and trade protectionism still exist. The government will continue to promote all feasible policy responses during the new year.

In the future, relevant government departments will comprehensively guide online marketing, supply trade finance, solve logistics problems, and promote support measures that can boost export vitality. In addition, they will actively expand emerging markets such as RCEP, Korea-Indonesia CEPA, and expand South Korea’s exports. It actively cultivates potential projects, accelerates the increase of the added value of export projects, and builds a Korean online platform to promote the entire digitalization of export marketing, finance, payment, and logistics, and strives to cultivate export enterprises and innovative trade structures.

Published by Jun 08, 2021 Source :mofcom, Source :trademag

Further reading

You might also be interested in ...

Headline
Market News
Emerging Technologies and Market-Driven Integration of the Machine Tool Industry Chain
In the fast-evolving global manufacturing landscape, electric vehicles (EVs), semiconductors, and aerospace industries are emerging as key drivers of technological upgrades. These sectors share a common requirement for complex and high-precision components, which conventional machining methods alone can no longer fully address. This demand is reshaping the machine tool industry chain, from upstream components to midstream machine manufacturing and downstream applications, all showing strong trends toward integration and intelligent development.
Headline
Market News
From Cold Chain to Retail: How Smart Labels Are Reshaping Supply Chains
As the IoT rapidly advances, traditional printed labels are evolving into intelligent “smart tags.” No longer merely adhesive printings, these tags embed chips and sensor modules to enable real-time product tracking, authentication, and even consumer interaction. This technological shift is reshaping operations across logistics, retail, healthcare, and manufacturing.
Headline
Market News
Can CNC Technology Make Food Processing Faster and Safer?
The core requirements for food processing equipment lie in safety, efficiency, and durability. CNC (Computer Numerical Control) technology, with its precision and automation advantages, has become a key enabler in the manufacturing of slicers, packaging machines, mixers, and other equipment. With the global food processing equipment market projected to grow from USD 55 billion in 2023 to USD 75 billion by 2030 (a CAGR of approximately 4.5%), CNC is driving the industry toward greater intelligence and efficiency.
Headline
Market News
Do You Know the Manufacturing Secrets Behind Sports Equipment?
In the sports equipment industry, CNC (Computer Numerical Control) machines are the key driver for high product performance, extended durability, and enhanced market competitiveness. From golf clubs to bicycle frames, CNC machining combines high precision and flexibility, not only meeting the strict quality demands of professional athletes but also providing efficient and customizable manufacturing solutions for buyers.
Headline
Market News
Supply Chain Restructuring under the US–China Tech War: How Machine Tools Empower Autonomous Electronics Manufacturing
Globalized supply chains were originally driven by an “efficiency-first” mindset. However, in the context of the US–China tech competition, geopolitical tensions, export controls, and technology embargoes have placed multiple pressures on the electronics industry, including chip restrictions, equipment limitations, and trade barriers. Traditional production models, which rely on concentration in a single region, have become increasingly unsustainable. These developments have prompted companies to recognize that, beyond cost reduction, ensuring supply chain stability and control over autonomy is now far more critical.
Headline
Market News
Nurturing Talent in Taiwan's Manufacturing Sector: The Government's Strategy for a Competitive Future
The global high-tech sector is at a critical crossroads, facing the dual challenges of rapid technological iteration and a severe talent shortage. In Taiwan, a world-renowned hub for precision manufacturing, the situation is no different. As the end-user market demands higher precision processing and the wave of smart manufacturing and digital transformation sweeps in, the government has long recognized that nurturing talent is paramount to maintaining the nation's industrial competitiveness.
Headline
Market News
Elevating Drone Manufacturing: The Machining Advantages of CNC Machines
With the rapid expansion of the unmanned aerial vehicle (UAV) industry, CNC (Computer Numerical Control) machines play an indispensable role in precision manufacturing. According to market research firm Grand View Research, the global drone market is expected to grow from approximately USD 40 billion in 2023 to USD 90 billion by 2030 a remarkable trajectory. CNC machining’s high-precision capabilities, from structural components and electronic parts to critical modules, can directly impact drone performance while linking the entire supply chain from raw materials to global trade.
Headline
Market News
U.S.–China Trade War and the Russia–Ukraine Conflict: Challenges and Adjustments in the Textile Raw Material Supply Chain
The textile industry has always been one of the most globalized sectors, with raw materials often crossing multiple borders before reaching the apparel market. However, in recent years, growing geopolitical uncertainties—most notably the U.S.–China trade war and the Russia–Ukraine conflict—have created unprecedented challenges for textile supply chains. Trade frictions between the U.S. and China have restricted exports of cotton and fabrics, forcing brands to reassess sourcing strategies. Meanwhile, the Russia–Ukraine war has driven up energy and chemical raw material prices, indirectly raising costs for synthetic fibers such as polyester and nylon. Together, these factors are pushing the global textile industry to rethink supply chain resilience and its future trajectory.
Headline
Market News
From Policy to Production: How Smart Machine Monitoring is Reshaping Global Factories
In the global manufacturing industry’s shift toward Industry 4.0, smart upgrades are no longer optional—they’re essential for staying competitive. At the core of this transformation is the conversion of traditional factories into data-driven, smart ecosystems. This complex undertaking isn’t something companies can tackle alone. A series of policies and international collaborations, from governments’ high-level strategies to industry alliances’ communication standards, are paving the way for smart manufacturing. This allows technologies like remote monitoring and predictive maintenance to move from blueprints to reality more quickly, fundamentally changing how factories operate worldwide.
Headline
Market News
Aerospace Supply Chains Move to India: Growth and Opportunities in a Rising Market
Amid constrained Western supply chains and rising geopolitical risks, aerospace giants like Airbus and Rolls-Royce are increasingly sourcing components from India, driving the local industry from basic manufacturing into design, engineering, and systems integration. Backed by low-cost labor, supportive policies, and improving infrastructure, India is rapidly emerging as a global aerospace hotspot, aiming to capture 10% of the market in the next decade. Simultaneously, Taiwanese firms are responding to the “China+1” strategy by boosting investments in India and planning industrial parks in Telangana to diversify risk and seize new opportunities. By combining India’s cost and workforce advantages with Taiwan’s precision manufacturing and certification expertise, the two sides are poised to build a cost-competitive, high-value aerospace supply ecosystem—creating a win-win scenario in the global industry.
Headline
Market News
AI Accelerates CNC Programming: The Innovative Path of CAM Assist
In CNC machining, programming has long been a productivity bottleneck, with experienced programmers spending hours or even days planning toolpaths, while the global manufacturing industry faces a shortage of skilled labor, creating hidden challenges for deadlines and cost control. AI CAM tools like CloudNC’s CAM Assist overcome these limits, generating professional machining strategies in seconds—cutting programming time by around 80%—and integrating seamlessly with Fusion 360, Mastercam, and Siemens NX to ensure precise cutting and secure data protection. Real-world applications show production can effectively double, allowing programmers to focus on higher-value tasks, making AI an increasingly indispensable tool in CNC programming.
Headline
Market News
The Rise of Southeast Asia: The New Epicenter and Future Outlook of the Global Textile Supply Chain
The global textile industry landscape is undergoing a rapid transformation. Southeast Asia, with its unique cost advantages, policy support, and industrial upgrades, is emerging as a new supply chain hub. As international brands actively diversify their production bases, key countries like Vietnam and Indonesia are becoming hot spots for foreign and technological investment. This article will delve into the driving forces behind the rise of the Southeast Asian textile industry, analyze the current production status and investment trends of major countries, and examine the challenges and future development directions of the industry, helping businesses seize new opportunities in the restructuring of the global supply chain.
Agree