<소논문>The in-external problems Korea has in the era o

정원준 · 2007-06-09T17:25:00+09:00

English Lan and Lit Jung, Won-Jun 1.Introduction -On April 2nd, Korea-United states free trade agreement was contracted. Even though some people protest against free trading insisting it will deprive us of many things, it is an inevitable currency of the world economy and it can be advantageous according to how Korea deals with it. Historically, Korean economy has been an export first economy. After the Korean war was finished, there was nothing left in Korea. Poverty was prevailing, all the infra structures were destroyed, people were uneducated, the land became smaller and the natural resources became even decreased. From the exportation of raw materials such as coal, tungsten, human hair and the first auto mobile of Hyundai that was composed of steal cans in 1970, the history of exportation of Korea has began and it has devoted a lot to the improvement of Korea. In short, I can say that there's no doubt that it was trading that has done the most important role in the improvement of Korean economy. And, the importance of trading has been more and more increased nowadays in accordance with the increase of interdependence between nations and expanding free trading through which countries became able to trade without tariff that used to prevent countries from actively trading with other nations. Therefore, what is important for Korea to survive in the era of free trading is adapting to this new trading circumstance properly and utilize it in the most profitable way. However, Korea still has many internal and external problems that should be resolved to make it. The first part of the main subject of my pater contains the explanation of the internal and external problems with which Korea has been confronted and solutions of them. And in the second part, since China is the biggest trading partner to Korea, I dealt with the effects China will have on Korean industries as the free trading begins. Moreover, I mentioned what kind of countermeasure Korean industry should take to cope with it. 2.Main Subject 2.1 The internal and external problems with which Korea is confronted. And brief suggestions about them. 1) internal problems a. Strong Labor Union -From the reign of Kim Dae-Jung, labor unions have become bigger and bigger and began to get power thanks to the support from government. At first, labor unions were formed to protects workers from being misused or humiliated by company and government. However, as the bigger power they've become possess, they've lost their identity pursuing political power and money. This phenomenon is prevailing in korean companies and it's undermining the competence of companies. The labor union of Hyundai motors definitely shows its negative effect. Continuous strike and demonstrations of labor union, Hyundai motors got great amount of loss last year and lost the trust from consumers. b. Excessive Regulations - To compete with other countries, Korea should abolish thousands of regulations that refrain foreign companies from launching in Korea, It the regulations are abolished and provide good environment to run companies and factories, Korea'll be able to snatch the companies that were supposed to be launched in China and India. And as a result of it, we'll get foreign capital from them and will be able to solve one of the biggest social problem 'Unemployment'. Not only to foreign enterprises, but also to domestic enterprises, abolishing regulations will be advantageous. Because it will allow domestic enterprises to operate more actively. c. Not enough Research and Development - In comparison with the GDP of Korea, the R&D accounts for 2.96％.(Japan 3.1％) Even though this percentage is the world's 4th biggest, we shouldn't be satisfied. It's because it's investment income has been awfully low and the R&D of Korea can't attract foreign investment. And other countries are focusing more on R&D nowadays. Therefore, we should concentrate more on R&D to enhance the compete power of the main staples of Korea that requires high technology. d. Education - It may be the biggest potential problem that doesn't seem to be that much serious now. There are hundreds of universities and colleges in Korea. However, most students want to enter business school, law school, medical school not technical college. This tendency occurs on account of the notion Korean people have about technician. If all the people manage enterprises sitting on the desk, who can develope goods? The government should provide support the students who study engineering to procure the future competitiveness of Korea. 2) External Problems a. Competition - Nowadays, the countries that are used to be regarded as undeveloped countries are newly emerging. Especially China, world's one of the biggest country, is dominating Korean agriculture industry and attracting many factories from several multinational companies. In addition, the shipbuilding industry of China has already got ahead of that korea. And India is quite similar to China nowadays even though it's now far less influential than China. Meanwhile, Japan, world's second richest country in the world has completely recovered from the 10 year depression and getting prosperous keeping good relationship with United States. Therefore, Korea should compete against them despite many disadvantages such as small land and natural resources. And it's a matter of survival in 21st century an era of free trading. b. Small trade base -Auto mobiles, Ships, cell phones, LCD TV, and some home appliances are the major goods that Korea exports and it takes more than 90percents of the whole exportation of Korea. These products from Korea are popular world widely up to nowadays. However, we should prepare for the change. What would happen if Samsung become bankrupt and Hyundai become taken over by Toyota? The result is obvious. Therefore, Korea should diversify the staples by developing small and middle size enterprises. 2.2 The effect China's entry of WTO has on Korean industries. And our countermeasure against it. a. From the perspective of chinese industry, the low value, low technology goods that are estimated to be relatively competitive will be more exported toward Korea as the trade barrier against China has become molified. b. To Korea, it is a nice chance to get bigger market and as the emergence of new industry, Korea will be able to export more and get more chances to invest. Simultaneously, However, on account of the difficulties such as intensified competition in Chinese market, enhanced compete power of Chinese industry, and relatively contracted foreign investment toward Korean machine industry because of China, the liquidation of uncompetitive field of Korean industry will be accelerated. c. Korea and china should enhance cooperation system.(Japan also) Despite the fact that there's no regional organization in the North East Asia different from North American area and Europe and there are huge gaps in economic strength and economic systems between countries, the countries in North East Asia have had trade very actively and the economic cooperation has been very strong. So that North East Asia is estimated to be an promising region to the world. (High tech-Japan, experience of development and industrial technology-Korea, Huge market and new base of manufacture-China, natural resources-Russia, Skilled labor force-North Korea). Especially in machine industry, in which both cooperation and competition are co-existing, it seems that there's are more factors that can improve the compete power of both countries through enhancing cooperation. However, the relationship between China and Korea is still just an trade partner to each country and there no active cooperation to construct regional economic community. Therefore, if both Korea and China propel industrial cooperation from the strategic perspective for constructing 'Future Oriented North East Asia economic community', it will be possible for both China and Korea to be developed mutually resulting great benefit. 3. Summary and suggestion - So far, I've arranged the problems Korea has internally and externally and some solutions about them and the effects China's entry of WTO has on the Korean industries. And our countermeasure against it. As the globalization is prevailing and free trading is expanding, we're now living in the era in which the survival of a nation is relied on trade as I mentioned in the Introduction. Therefore, what is now important to Korea is how to deal well with this currency and take maximum advantage of it. To accomplish it, Korea should effectively resolve the problems I mentioned above and cooperate well with other nations not regarding them as partners not only rivals on which we should step. Again, I want to emphasize that free trading is not something we should be afraid of but a chance that has tremendous possibility through which Korea can advance toward the world and become prosperous.

정원준2007.06.09