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Troll_Bait
Joined: 04 Jan 2006
Location: [T]eaching experience doesn't matter much. -Lee Young-chan (pictured)
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 Posted: Wed Mar 28, 2007 7:44 pm Post subject: Korean business feels the pinch between China and Japan |
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From the International Herald Tribune ...
Korean business feels the pinch between China and Japan
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As South Korean and U.S. negotiators huddle in Seoul for make-or-break free-trade talks this week, corporate South Korea is grappling with a troubling question: How can the country avoid being crushed by competition from low-cost China and high-tech Japan?
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South Korean corporate investment in 1996 was equal to 40 percent of gross domestic product. That ratio had plummeted to 28 percent by last year. South Korea's trade surplus with China last year shrank by 10 percent to $21 billion, the first such fall in five years, while its trade deficit with Japan expanded by 4 percent to a record $25.3 billion.
The data, experts say, testify to the onset of obsolescence for South Korea's role as technological middleman between China and Japan.
Corporate South Korea depends on exports of components and semifinished electronic goods to China for much of its earnings. But it still relies heavily on Japanese high-tech parts and manufacturing skill to produce those exports.
South Korea is the world's biggest producer of computer memory chips and flat-panel displays. But Samsung, Hynix and LG.Philips factories all operate on Japanese machinery. Meanwhile, China is moving fast to build its manufacturing inputs at home - often at a cost South Korea cannot match.
"Many Korean companies are benefiting from strong demand from China," said Tariq Hussain, the Seoul-based author of the book "Diamond Dilemma," which assesses the economic challenges and opportunities facing South Korea. "However, as China-based capacity comes online and longer-term demand eases off, Korean manufacturers will be among the hardest hit."
In January and February, Chinese shipyards won more orders than their South Korean counterparts for the first time, and China will soon overtake South Korea as the world's largest shipbuilding country.
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rothkowitz
Joined: 27 Apr 2006
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| Posted: Wed Mar 28, 2007 8:36 pm Post subject: |
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I talked to my Samsung class of new overseas sales recruits about what Korea will do when China gets truly up and running.
They actually weren't that concerned,saying it will benefit Korean trade(couldn't quite say how)and that Korean products have a particular brand value anyways.
Personally,I'd buy Japanese.The few Korean products I've bought invariably have some kind of glitch.They're probably pretty safe with steel and ship production though. |
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Mashimaro
Joined: 31 Jan 2003
Location: location, location
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| Posted: Wed Mar 28, 2007 9:27 pm Post subject: |
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You mean we are not in the hub of asia?
I want my money back |
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Dev
Joined: 18 Apr 2006
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| Posted: Wed Mar 28, 2007 10:15 pm Post subject: |
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Thanks for posting this! A very interesting article.
This fact is particularly revealing.
"South Korea is the world's biggest producer of computer memory chips and flat-panel displays. But Samsung, Hynix and LG.Philips factories all operate on Japanese machinery."
Now you know where a lot of this "We hate Japan" comes from. |
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