Trade minister warns South Korea must now chase China, not the other way around

Minister of Trade, Industry and Energy Kim Jung-kwan has identified building an organic AI transition ecosystem as the top priority for sustaining South Korea's national competitiveness, calling for close collaboration among businesses, government and academic institutions to gain an edge in the intensifying global race for innovative technology.

Kim made the remarks Friday morning at the 289th Korea Employers Federation Forum, held at the Westin Chosun Seoul in Jung-gu, Seoul, where he delivered a lecture titled "A New Age of Exploration: M.AX Alliance." He said the AI transition through research and development "is a matter of survival."

"In the 15th-century Age of Exploration, nations that set out to find new routes prospered and grew, while those that turned away fell into decline," Kim said. "AI is like the compass — a new technology that emerged in that age of exploration. Whether we leap forward or head back into decline will be determined by how we harness AI, backed by urgency, technology and talent."

Kim also stressed the importance of nurturing talent. "A single Chinese company has 110,000 engineers who graduated from engineering programs," he said. "By contrast, South Korea has only 100,000 engineering graduates across the entire country — and even that number is expected to be cut in half by 2040."

He recalled a visit to Xiaomi's automobile manufacturing factory in China, saying a car rolled off the line every 76 seconds and the factory automation rate reached 91 percent. "There are no people inside the factory," he said. "The time has come for us to think not about how China is catching up to us, but about how we are going to catch up to China."

Kim pointed to China's rapid growth as rooted in an ecosystem where government, industry and academia move as one team, and said South Korea must accelerate its AI transition through the M.AX Alliance. Launched in September last year, the M.AX Alliance is a public-private partnership established to put the Ministry of Trade, Industry and Energy's "AI transformation of manufacturing" policy into action.

"We still have government doing its own thing, large companies doing theirs, small and medium-sized enterprises doing theirs, and academia doing its own research independently," Kim said. "We cannot catch up with a competitor like China that way. The government will take the lead in building a system where each sector can communicate organically, using the R&D funding and policy tools at our disposal."

Kim also called on business leaders to show leadership as a driving force for the AI transition. "When I first started the M.AX Alliance project, I thought of the late Hyundai Group Honorary Chairman Chung Ju-yung's words: 'Have you even tried?'" he said. "When I talk about the AI transition, people sometimes say, 'Most of our employees don't even know what it means — how can we push ahead?' I would ask them to first ask themselves whether they have tried."

Closing his remarks, Kim said exports this year are expected to reach a record high, yet South Korea still accounts for only 3 to 4 percent of the global market. "There is still a vast, untapped market of 96 to 97 percent out there," he said. "We must use our competitive strengths to secure a legacy in this new age of exploration called AI and pass it on to the next generation."

"The AI transition battle ahead cannot be shouldered by any single company alone," Kim said. "Without building an ecosystem where all related companies can move together, we will not only fail to succeed — we risk losing the competition entirely. The government will play the role of facilitator in supporting businesses and building an innovation ecosystem, and through that, lead South Korea's prosperity in the AI era."