Last January, the Chinese AI model 'DeepSeek' caused a stir globally. It matched ChatGPT's capabilities while utilizing affordab...
Last January, the Chinese AI model 'DeepSeek' caused a stir globally. It matched ChatGPT's capabilities while utilizing affordable semiconductors, bypassing the need for high-end NVIDIA chips restricted by U.S. sanctions. What was even more astonishing was its rapid development time: just "two months," significantly less than ChatGPT's year-long development. This unprecedented "China Speed" is central to the country's growing influence.
Ten years ago, Chinese Premier Li Keqiang lamented, "As the world’s largest steel producer, we still cannot make a single ballpoint pen tip." At the time, China produced 80% of the world’s ballpoint pens, but the core technology—the pen tip—was mostly imported from Japan, Germany, and other countries. The deep-seated complex was that "Chinese manufacturing is big but not strong (大而不强)."
Ten years on, China has evolved from a "low-cost production center" to a "leading manufacturing giant." This shift is attributable to the national initiative "Made in China 2025," which supports 10 vital sectors, such as robotics, shipbuilding, electric cars, batteries, and the aerospace industry. Currently, China manufactures half of the world's industrial robots, and in aerospace—an area where South Korea's capabilities are limited—China has independently operated an unmanned space station and achieved the world's first landing on the dark side of the moon. This remarkable change has taken place in a mere "10 years."
The rate at which Chinese manufacturing innovates is truly impressive. In contrast to established car manufacturers such as Hyundai Motor and Kia, who require 3–4 years to create a new vehicle, Chinese electric vehicle (EV) firms are launching new models in a mere 1.5 years. Aito, a collaborative effort between Huawei and EV manufacturer Seres, introduced its high-end M9 model in December 2023, only two years after the company was established, and quickly rose to become China's leading premium car brand within a year. This is a stark contrast to the 48 years it took Hyundai Motor to introduce its premium brand, Genesis. Huawei, Xiaomi, conventional car manufacturers, and battery producers have rapidly coalesced into a unified force, swiftly taking control of the EV landscape.
1. In 2001, when China became a member of the World Trade Organization (WTO), its manufacturing sector was the 23rd most competitive worldwide. In just over two decades, it ascended to the second position, trailing only Germany. 2. The United States, which has a manufacturing legacy spanning more than a century, holds the fourth spot, while Japan is fifth, and South Korea is third. 3. "China Speed" is distinct from the "Miracle on the Han River," which represented rapid, condensed growth. While the Han River Miracle focused on industrial development, China is concurrently expediting industrialization, informatization, and the AI revolution. 4. Harvard University assessed national competitiveness across five crucial technological domains—artificial intelligence, biotech, semiconductors, space, and quantum—and determined that China held the second position in all areas, after the U.S. 5. South Korea's rankings were fifth in semiconductors, ninth in AI, and tenth in biotech, but it did not achieve a top-ten ranking in either space or quantum technology. 6. Chinese manufacturing is incorporating Fourth Industrial Revolution technologies, such as AI and big data, into its production facilities at a faster rate than any other nation. As a result, 41% of the world's "lighthouse factories," which are at the forefront of manufacturing innovation, are situated in China.
In the economic and industrial arena, success hinges on swiftness. Chey Tae-won, Chairman of SK Group, warned, "Considering the rapid pace in China, it's likely we'll fall behind and fail." This "China Speed" is fueled by the Chinese Communist Party, which leverages its massive domestic market of 1.4 billion consumers as a testing ground for businesses. Chinese companies launch products even in unfinished states, rapidly refining them based on market response. The party overlooks safety incidents and data breaches that may occur—a compromise Western nations cannot match. This approach has allowed autonomous driving technology to achieve world-class status in a remarkably short period.
China's research and development efforts are geared more towards bringing products to market than exploring core technological principles. In the previous year, China invested ₩705 trillion in R&D, surpassing South Korea's total national budget of ₩656 trillion. However, a significant portion of China's R&D budget, 82%, was dedicated to experimental development aimed at commercial applications, rather than basic research. The United States is strong in basic technologies, but China is the leader in commercialization. Even in areas like foldable phones, initially pioneered by Samsung Electronics, Huawei was the first to introduce a smartphone with a double-folding design.
Faced with the challenge of closing the gap with more developed nations, China has adopted an audacious strategy of "leaping" ahead. For example, it bypassed traditional landline telephone systems in favor of mobile phones, leapfrogged credit cards by adopting mobile payment solutions, and embraced electric vehicles due to its limited capacity to produce advanced internal combustion engine technology.
The intense internal rivalry within China, surpassing even that found in free-market economies, is another driver of rapid progress. The extreme competition is evident in the electric vehicle sector, where only a tiny fraction (three out of over 200 companies) are making money. Any delay can result in failure. Chinese shipbuilders regularly finish vessels ahead of schedule, driven by employees' relentless pursuit of performance-based bonuses, which often surpass their standard wages. The United States is unable to keep pace with China's swiftness in building warships. Annually, 400,000 highly skilled individuals join STEM fields, and engineers are compensated better than physicians—a societal incentive system that facilitates this rapid advancement.
Commentators describe China's rapid development as akin to witnessing a gigantic, frighteningly fast-moving assembly line. Previously, South Korea's "speed" was its advantage and source of awe among international observers. However, following democratization, this "speed" has transformed into a detriment, with social and political disputes escalating at alarming rates. The construction of SK Hynix's Yongin semiconductor complex, for example, only commenced last February, a full six years after the initial investment. Even semiconductor research and development is hampered by the 52-hour workweek, which restricts the working hours of dedicated individuals.
Every government has promised to get rid of rules—things like "utility pole rules," "nail rules," and "spiderweb rules"—but no one has managed to do it. Political groups stuck in disagreements based on their beliefs have made things more tense and divided. Many business rules, such as the 52-hour workweek and the yellow envelope bill, always make things take longer.
Democracy and rapid progress frequently appear to be at odds. However, Elon Musk, an American known for his relentless work ethic, challenges this notion. South Korea, with its limited population, market, and resources, coupled with average technological capabilities, faces a critical juncture. If it fails to recapture the "Han River Speed" of its past, its economic survival is at risk. To foster innovation, the government and opposition must collaborate to eliminate obsolete regulations hindering emerging technologies and industries. They should adopt a "permit first, regulate later" approach, empowering businesses to accelerate their development. Should South Korea fail to achieve even half the pace of innovation seen in China, its manufacturing sector faces extinction.
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