Recently, according to official data released by South Korea, China's trade surplus in China South Korea reached 14.4 billion US dollars from January to July 2023. In 2018, China's trade deficit with South Korea reached $55.6 billion.

China's transition from South Korea's largest source of surplus to a trade deficit country took less than 5 years. According to South Korean media reports, the long-standing trade surplus between South Korea and China has shifted

In the past, South Korea had a relative competitive advantage in fields such as LCD panels, smartphones, electric vehicles, and new energy batteries, and China needed to import related products from South Korea.

Nowadays, with the rapid improvement of the competitiveness of Chinese enterprises, their market competitiveness and market share in these fields are significantly ahead of those of South Korea.

China not only has a significant decrease in demand for Korean related products, but also competes with South Korea in the global market.

In the field of LCD panels, Chinese companies have already occupied 36% of the global market share in the scale of LCD panel and OLED display screen industries, ranking first.

In 2021, the market share of panel manufacturers in Chinese Mainland will be 41.5%, and further increase to 43% in 2022. In February 2023, it skyrocketed to 70%, while Japan and South Korea combined only accounted for 9%.

In the field of new energy vehicles and power batteries, the advantages of Chinese enterprises are more obvious. China currently holds over 60% of the global market share for new energy vehicles and power batteries, while the market share of Korean companies continues to decline.

In the first five months of 2023, China exported 1.933 million vehicles, a year-on-year increase of 80%, with a total amount of 266.78 billion yuan, a year-on-year increase of 124.1%.

In the field of smartphones, although South Korean company Samsung Electronics still ranks first in the global mobile phone market share. But in the Chinese market, it is facing strong challenges from Apple and Chinese mobile phone companies.

At present, Samsung's market share in China has sharply declined, from the highest of 20% to less than 2% today.

In addition, Chinese companies are also increasing their market share in other fields.

According to the survey and analysis of the global market share of 63 key products and services in 2022 by Nihon Keizai Shimbun, the share of Chinese enterprises in 18 industries, including cutting-edge materials, electric vehicles and LCD panels, has increased.

Among these 18 industries, there are 13 in which Chinese enterprises account for over 30% of the market share.

As the competitiveness of Chinese enterprises improves, China's demand for Korean products decreases and imports decrease. Meanwhile, Chinese companies are constantly squeezing the survival space of Korean companies in the global market.

The Reasons for the Great Reversal of Trade between China and South Korea

China's demand for Korean products continues to decline, while South Korea's import demand for Chinese products continues to grow, which is the most direct reason for South Korea's rare trade deficit in China South Korea trade.

Moreover, this trend may continue or even further expand in the future.

The second key for China to reverse its trade with South Korea is to strengthen cooperation with other trading partners. China actively participates in multilateral trade cooperation, such as signing a series of free trade agreements and cooperation agreements with regions and countries such as ASEAN, the European Union, and the United States.

The cooperation between China and other countries has led South Korean enterprises to cooperate more with Chinese enterprises, achieving closer connections in technology research and development, innovation, and industrial development, thereby improving the pattern of trade between China and South Korea.

In addition, China's success in reversing trade between China and South Korea also benefits from its firm trade policy. China aims to protect its own industries by implementing a series of trade policies.

These measures provide more development opportunities for China's local industries and gain more advantages in global market competition. China's firm trade policy has forced Korean companies that rely on the Chinese market to reassess their strategic positioning.

Overall, the key to China's successful reversal of trade between China and South Korea lies in building a strong domestic market, strengthening trade cooperation and diversification, and adopting a firm trade policy.