Korean Job Discussion Forums

earthbound14 · Joined: 23 Jan 2007 Location: seoul

This is my big beef againts protectionist Korea.

As I stated before I've usually been in favour of protected economies. I prefer the idea of buying local and am well aware of the fact that large international corporations will do their best to eliminate smaller local industries...even if those industries are producing better products (although not usually cheaper, as using labour from poor countries has normally been the way in which a company has been able to lower prices and put more respectable competition out of business).

What bugs be about Korea is the extreme localism of industry. Korean companies use cheap labour in China, they have little regard for the environement and seem to demonstare even less regard for the consumer. They even show that they are slow to make advancements. My opinion is that a protected economy will allow greater quality to a certain extent, that a fully open economy only promotes cut throat economics. Korea seems to be at the other end of the spectrum. They are so protected and unrealistically so that they simply do not have to compete.

Hyosung Motorcycles is my favourite example. They have been producing bikes for 30 years, they have been producing a 650cc bike now for 6 years. They have done little to change the initial bike, they do not respond to consumer demands, they do not advertise or commuincate with the consumer, they do not even have an updated web site with valuable information in the US where the free market should suggest they need one. They are generally a very poorly run company that exists only because they are protected and they persist in stupid business practices because they are clueless (even though they are in western markets) about good business practices. Their prices are high while the quality and reputation of their product is low. Even in western countries they lose out to Japanese products (they are often better priced, not cheaper, but far more reasonably priced when compared with their quality).

A comparison with Japan usually reveals that similar bikes in Japan from the local Japanese manufaturers are the same price as the local products produced for the Korean market. A quality Japanese bike in Japan costs about the same as a lower quality Korean bike in Korea.

Now in Korea, Korean bikes are the cheapest thing to buy, and they are in reality a bit cheaper than buying them abroad. This is all true, but I think they should be cheaper. They are artificially high (to the point where they are the same as the prices of better quality products in Japan) yet are offering a much lower quality of product. They actually offer less quality to the local market (less variety, and lower standards, poorer web sites and less communications with the consumer) than they do in foreign markets.

On top of this import bikes are ridiculously expensive. Bikes from outside the country simply cannot compete with Korean products when a similar Korean product exists. Even if the quality of the import product is significantly better. This means that low quality products have a monopoly.

Basically if Koreans wish to ride a motorcycle they have to buy a cheap poorly built Korean bike from a manufacturer that has demonstrated how little they care about the local consumer (and a key reason why their 650 has never taken off in Korea and why Koreans prefer Daelim or expensive Japanese bikes) or they have to buy an extremely expensive import.

This market is unrealistically protected.

The end result is that many Korean products are unrealistically expensive, in some cases more expensive than western imports (bicycles, notebook computers, hiking gear, Lespo bikes, LG laptops and Blak Yak hiking gear are all more expensive then Trek bikes, Toshiba laptops and Columbia hiking gear while they are virtually unknown outside the country) while not providing the same quality as their western counter parts or even their own products abroad (Korean cars made for the Korean economy are not able to be imported to Canada because the standards here are too low).

Certain elements of the Korean ecomony are artificially inflated as well. The point about whisky is a good one. it is expensive for a number of reasons. AS a drink of the rich foreign business men of the past (something that was expensive to poor Koreas even without import costs) it has become a symbol of wealth and has earned itself an unrealistic status. However, this is also because of protectionist policies. It's hard to say which had ha greater effect on creating a higher price. But without protectionist policies the prices would surely come down, perhaps not the same as the west, but they would come down.

Enrico Palazzo · Mod Team Joined: 11 Mar 2008