Measurement And Analysis Of Competitive Interdependence Of China And South Korea In Automobile Industry

Automobile industry is an important export industry and pillar industry of national economy in both China and South Korea.Both countries have a strong desire to cultivate the automobile industry into an industry with international competitiveness.For South Korea,China's huge automobile market is an important force to promote the globalization of South Korea's automobile industry.It is of great significance for promotion of collaborative innovation development of the two countries to study the all-round cooperation of the automobile industry,to build a cooperation platform for common development,and to find a competitive and cooperative position suitable for the coexistence and development of the two countries.This paper constructs the index system for measuring competitive interdependence,uses trade data from 2007 to 2017 to measure and observe the competitive interdependence structure and changing characteristics of the automobile industry in China and South Korea,quantitatively analyzes the influencing factors forming the competitive interdependence of Chinese and South Korean automobile industries by using multiple regression method,and attempts to provide empirical basis and reference for policy decision in the automobile industry of the two countries to achieve higher level of cooperative development.It is a very complicated problem for competitive interdependence and its influencing factors of the automobile industry in China and South Korea.This paper makes a preliminary analysis and discussion of this problem and some important findings are obtained.Firstly,the measurement results of Revealed Comparative Advantage(RCA)show that the relationship in the world market of the automobile industry in China and South Korea is mainly complementary,only a few products show signs of competition and this competition has not yet become a mainstream.However,the measurement results of CS and CC show that the export similarity of automobile products of the two countries has an upward trend.It indicates that the competition relationship will become intensified in the future.Secondly,the measurement results of GL show that the intra-industry trade of complete vehicles between China and South Korea is dominated by horizontally differentiated products.However,the intra-industry trade of small-displacement and large-displacement vehicles is dominated by vertically differentiated products.In the intra-industry trade of small-displacement vehicles,China represents net export and South Korea net import,which shows that China and South Korea have a vertical complementary relationship in the field of small-displacement and large-displacement vehicles and have a horizontal complementary relationship in the field of mediumdisplacement vehicles.Thirdly,tariff,resource endowment,labor cost and enterprise characteristics have different influences on the competitive interdependence of automobile industry in China and South Korea.First of all,China's high tariff hinders the improvement of the competitive advantage of China's automobile industry,hinders the division and cooperation of labor in the automobile industry,and intensifies the competition between the two countries in the world market.The increase of capital intensity in Chinese industry did not improve the competitive advantage,nor did it effectively promote the intraindustry cooperation with South Korea.Rising wages in Chinese industries have weakened Chinese comparative advantage,influenced intra-industry cooperation,and to some extent increased competition with South Korea.Finally the heterogeneity of Chinese enterprises improves China's export advantage and also improves South Korea's export advantage.It shows that through the cooperation with China in the industry,South Korea has obtained intermediate products with higher quality relative to the price,which indirectly improves the export competitive advantage of South Korea.The policy implications of the above conclusions are as follows: first of all,tariff is the important factor affecting the competitive interdependence between China and South Korea.High tariff neither improves export advantage nor reduces the degree of competition between the two countries,and brings adverse effects to the cooperation and development of the two countries.China and South Korea should take the FTA agreed by both sides as the framework of action,continue to promote the level of trade liberalization,improve the uncoordinated factors in tariff and non-tariff measures between the two countries,and expand and improve the cooperation in the automobile industry of the two countries.China should reduce the protection intensity of enterprises and build a channel for direct cooperation between China and South Korea;on the other hand,the global automobile industry is changing from the competition of petroleum fuel vehicles to the competition of environment-friendly vehicles.The two countries should attach importance to make the best use of their comparative advantages and promote the indepth integration and development of environment-friendly automobile production technology and the emerging IT industries such as electronics,semiconductors and information and communication.Secondly,the increase of capital intensity of the Chinese industry has weakened the comparative advantage of the Chinese auto industry and increased competition with South Korea.This means that the main source of competitiveness of Chinese automobile industry is still the relatively low labor cost and the cooperation between China and South Korea is more vertical cooperation.This indicates that China should continue to upgrade the industrial structure and occupy a higher position in the international division of labor;on the other hand,it also indicates that China should avoid the negative impact of completely relying on capital expansion in the upgrading of industrial structure,should rely more on technological and management innovation to accumulate advantages for enterprises,and pay attention to improve the quality of cooperation with South Korea.Thirdly,the improvement of the production capacity of Chinese automobile industry has enhanced its competitive advantage,and also brought a positive impact on the cooperation and improvement of competitiveness of China and South Korea.This means that the improvement of the competitiveness of Chinese enterprises has brought healthy competition and full cooperation and some spillover effects to the development of South Korean enterprises.Therefore,the two countries should enhance the competitiveness of enterprises and achieve win-win cooperation.At the same time,it is not appropriate to provide direct protection through industrial trade policies,but should focus on improving the enterprise production and operation rate,and building a good market environment for the development of enterprises.Finally,an important issue of the cooperation between South Korea and China is the positioning of cooperation between the two countries.China occupies an extremely important position in the global automobile production and market,but Chinese comparative advantage as a production base is losing,which makes it necessary for South Korean enterprises to carefully examine the past cooperation route if they want to take China as a production base for overseas cooperation.This study provides an instruction for South Korean enterprises.The cooperation between China and South Korea in the future should be implemented through three routes that are direct investment,export and expansion of domestic production in South Korea according to different sources of comparative advantage of automobile products.