Issue Chinese competition threatens Korean market share in autos, petrochemicals and chips

Summary

KIET identifies intensifying competition from China as a central industry-level issue for 2026. Chinese EV makers are expanding in Europe, Southeast Asia and the Middle East and pushing into the Korean market, eroding Korean automakers' share and adding price pressure at home and abroad. In petrochemicals, rising Chinese self-sufficiency is cutting Chinese demand for Korean products, while Chinese commodity goods flowing into Korea reduce domestic output. US tariffs combine with this shift to worsen export conditions and intensify price competition and profit pressure for commodity products. In semiconductors, the institute judges the impact of Chinese catch-up limited in the short term given current products and technology, but expects Chinese firms to emerge as strong rivals over the long term. Textiles also lose export competitiveness in commodity products as China's low-price offensive continues.