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South Korean companies are getting tough on anti-dumping and patent infringement cases as they feel threatened by the intensifying price competition and narrowing technology gap with Chinese rivals even in high-tech fields.
Previously, trade disputes between the two countries had been centered on protecting trademark and design rights against counterfeit products, involving small and medium-sized enterprises.
Now South Korea’s export heavyweights, including POSCO Holdings Inc., Hyundai Steel Co. and petrochemical companies, are taking the lead in bringing patent infringement and trade secret leakage charges against Chinese peers with the South Korean government.
In the first half of this year, South Korean companies filed six anti-dumping complaints against foreign companies, asking for the government to slap tariffs on foreign goods or take action to stop their low-price offensives, according to the Ministry of Trade, Industry and Energy (MOTIE) on Thursday.
A majority of them has been lodged against Chinese firms in the sectors of steel, petrochemical, biotechnology, battery and new materials, in which China has been rapidly narrowing the gap with, or overtaken South Korea in terms of technology or output.
“Domestic conglomerates that rely on exports have generally refrained from filing anti-dumping complaints, considering their relationships with the target countries,” said a South Korean business group official.
“But the rise in anti-dumping and patent infringement cases indicates the significant sense of crisis these companies are currently feeling.”
LG Energy Solution’s lithium-ion polymer batteries
If the trend continues, the number of anti-dumping charges brought against China is expected to exceed the 11 cases filed in 2002, a year after China’s accession to the World Trade Organization.
DISGUISED INVESTMENT
In addition to intellectual property infringement, a number of Chinese companies were found to have leaked key technology after investing in South Korean companies.
In the first half of this year, China made 421 direct investments in South Korea, amounting to $2.99 billion. That accounted for 25% of foreign direct investments in the country in the same period.
That surpassed the all-time high $2.74 billion of their direct investments in the country in 2018 on an annual basis and nearly double the $1.58 billion for all 2023.
By industry, 76% of China’s investment in South Korea was funneled into the manufacturing sector, of which the electrical and electronics industries such as semiconductors and chemical industries such as rechargeable batteries made up about 80%.
Industry watchers said numerous Chinese investments in the country were seen as aimed at technology leakage.
According to the National Police Agency, China accounted for 10 of the 12 cases of overseas technology leakage crimes that occurred this year.
By Jung-hwan Hwang and Yeong-Hyo Jeong
jung@hankyung.com
Yeonhee Kim edited this article
