Companies in Busan, South Korea, are increasingly viewing China not just as a manufacturing base but as a strategic partner for technology collaboration and supply chain integration, industry experts say. This shift reflects broader trends in global supply chain restructuring, technological competition, and market diversification.

The upcoming 33rd Asia-Pacific Economic Cooperation (APEC) Economic Leaders’ Meeting, scheduled for November 18-19 in Shenzhen, Guangdong province, is expected to further stimulate business interest in the Chinese city. Shenzhen is widely regarded as a key gateway to China’s opening-up and a hub of innovation and digital transformation.

Jung Hyun-min, former vice-mayor of Busan and executive vice-president of the Busan Chamber of Commerce and Industry, noted that Shenzhen’s unique ability to seamlessly connect research and development, manufacturing, investment, logistics, and international markets within a single city cluster makes it an attractive partner for South Korean companies. “This interest is not a temporary trend but a structural shift,” he said.

China has been South Korea’s largest trading partner for more than 20 years, with bilateral trade continuing to grow amid deeper industrial-chain integration. According to Chinese customs data, trade between the two countries reached $231.33 billion in the first half of 2026, marking a 47.7 percent increase compared to the previous year.

Shenzhen’s industrial strength is significant. Since 2022, the city has ranked first among Chinese cities in total industrial output above designated size and industrial added value. Its research and development expenditure hit 245.3 billion yuan ($36.5 billion) in 2024, over 93 percent of which came from corporate R&D.

Such an innovation ecosystem is particularly important for South Korea’s tech-focused small and medium-sized enterprises, which rely on rapid idea validation to maintain competitiveness. Jung highlighted Shenzhen’s Huaqianbei parts industry chain as an example, where prototype development can take as little as one to two weeks.

Busan, known for its status as the world’s second-largest transshipment port and a major manufacturing cluster, stands to benefit from collaboration with Shenzhen. Kim Young-jae, president of the Busan Development Institute and the Busan-China Business Forum, emphasized that Shenzhen’s advanced component supply could complement Busan’s capabilities as a physical test bed. He also pointed to the positive impact of the bilateral dialogue initiated during last year’s APEC summit in Gyeongju, South Korea.

Jung added that cooperation between the two cities could extend beyond direct trade, leveraging frameworks such as the Regional Comprehensive Economic Partnership (RCEP), a free trade agreement to which both China and South Korea are signatories. This could facilitate integration into third-country markets.

Nonetheless, challenges remain for Busan companies engaging with Chinese counterparts. Jung pointed to difficulties such as information asymmetry in China’s diverse market, finding reliable partners, certification and legal obstacles, and uncertainties arising from ongoing China-U.S. tensions.

To address these issues, the Busan Chamber of Commerce and Industry has established a formal partnership with the Shenzhen International Chamber of Commerce, aiming to connect local companies with China’s innovation ecosystem and promote cross-border economic collaboration. Jung also suggested expanding cooperation beyond Shenzhen to include other Chinese cities such as Ningbo, Chengdu, and Shanghai to harness synergies across innovation, logistics, finance, and platform economies.

Kim highlighted additional areas of opportunity tied to South Korea’s national focus on semiconductors, physical artificial intelligence, clean energy, and high-tech industrial development, particularly in Busan and surrounding regions. He stressed that people-to-people exchanges are vital for narrowing information gaps and fostering mutual understanding, which can lay the groundwork for deeper business partnerships.

“China is investing heavily in artificial intelligence,” Kim said. “South Korean companies cannot afford to ignore these developments.”