China's push to become a world leader in high-tech industries has one neighbor particularly worried about new competition on the block: South Korea.
In the mainland's new economic blueprint unveiled on Saturday, known as the Five-Year Plan, Chinese Communist Party officials identified semiconductors as a potential tech sector to dominate. That has raised an alarm in South Korea's semiconductor industry, the world's largest after the U.S. with an 18 percent global market share.
At present, China commands just 3 percent of the global semiconductor market share but Beijing is hoping to increase that figure as part of its plan for new services industries, dubbed "New China," to bolster gross domestic product (GDP). Aside from semiconductors, "New China" sectors also include chip materials, robotics, aviation equipment and satellites.
Officials intend to achieve that goal by increasing the share of spending on research and development (R&D) to 2.5 percent of GDP for the 2016-2020 period, from 2.1 percent in 2011-2015, according to the new Five-Year Plan.
"China's announcement has of course not remained unnoticed, especially by large players in high-tech industries," economists at investment bank Natixis remarked in a report on Tuesday.
"Its aggressive push is worrying for [South] Korea's industrial giants. If we consider that Korea's major global comparative advantage is high-tech electronics, such threat becomes a systemic threat for the country's economic future."