South Korean firms look to Shenzhen as APEC summit nears
Businesses in Busan, South Korea's second-largest city and a key industrial hub, are shifting their view of China from a low-cost production base to a strategic partner for technology cooperation and supply chain integration, according to regional experts.
The shift comes ahead of the Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting, scheduled for Nov 18-19 in Shenzhen, China. Experts say the gathering will act as a catalyst, drawing more South Korean business attention to the southern Chinese technology powerhouse.
Why Busan businesses are turning to Shenzhen
Jung Hyun-min, former vice-mayor of Busan and executive vice-president of the Busan Chamber of Commerce and Industry, said interest from the local business community in Shenzhen has clearly increased.
“It is not a temporary trend but a structural shift driven by global supply chain restructuring, technological competition and market diversification,” Jung said.
China has been South Korea's largest trading partner for more than two decades. Bilateral trade reached $231.33 billion in the first half of 2026, a 47.7 percent increase year-on-year, according to Chinese customs data.
Shenzhen's innovation ecosystem attracts tech partners
Shenzhen's strength lies in its ability to connect research and development, manufacturing, investment, logistics and overseas markets within a single city cluster, Jung said. Since 2022, the city has ranked first among Chinese cities in total industrial output above designated size and industrial added value.
In 2024, Shenzhen's total research and development expenditure reached 245.3 billion yuan ($36.5 billion), with corporate R&D accounting for more than 93 percent of that figure, also ranking first nationwide.
For South Korean tech-focused small and medium-sized enterprises, this framework is crucial, Jung said. “The speed of validating an idea directly determines their survival,” he noted, pointing to the Huaqiangbei parts industry chain in Shenzhen, where some companies complete prototypes in just one to two weeks.
Complementary strengths between Busan and Shenzhen
Kim Youngjae, president of the Busan Development Institute and the Busan-China Business Forum, said the two cities complement each other well. Busan is the world's second-largest transshipment port and part of a major manufacturing cluster, while Shenzhen supplies advanced components.
“If Busan companies form cooperation with those in Shenzhen, I think it could help them not only utilize those technologies, but also open up new markets,” Kim said.
Cooperation could also extend beyond bilateral trade into third countries and regional supply chain integration under the Regional Comprehensive Economic Partnership, the world's largest free trade agreement, to which both South Korea and China are signatories.
Challenges remain for South Korean businesses
Jung acknowledged that Busan companies face several hurdles when cooperating with Chinese peers. These include information asymmetry across China's diverse market, difficulty finding trustworthy partners, certification and legal barriers, and uncertainty stemming from China-US tensions.
To address these issues, the Busan Chamber of Commerce and Industry has established a formal cooperative relationship with the Shenzhen International Chamber of Commerce, laying the groundwork for connecting with China's innovation ecosystem.
Jung suggested cooperation should not be limited to Shenzhen. Other Chinese cities such as Ningbo, Chengdu and Shanghai could create greater synergy in innovation, maritime logistics, inland market access, finance and platforms.
Opportunities in semiconductors and AI
With the South Korean government emphasizing semiconductors and physical artificial intelligence, and Busan and neighboring regions hosting related projects, Kim said there are also opportunities for cooperation in clean energy and the high-tech industrial ecosystem.
Kim stressed the importance of people-to-people exchanges to narrow the information gap and enhance mutual understanding.
“Listening to recent news from the Chinese central government as well as Shenzhen, China is investing heavily in AI ... South Korean companies cannot afford to ignore these developments,” Kim said.
The APEC meeting in Shenzhen, under the theme “Building an Asia-Pacific Community to Prosper Together,” follows last year's gathering in Gyeongju, South Korea, and is expected to further boost economic dialogue between the two countries.