From: Stasi <[EMAIL PROTECTED]>
Subject: FT: Mighty China Strikes Fear Into Seoul HTTP://WWW.STOPNATO.ORG.UK --------------------------- Mighty China strikes fear into Seoul: Beijing's strength as a WTO member has replaced North Korea as biggest threat to South Korean prosperity. Andrew Ward reports Financial Times, Nov 21, 2001 By ANDREW WARD Until recently, the biggest threat to the lifestyle and prosperity of South Koreans was the lingering possibility of invasion by their aggressive communist neighbour, North Korea. But as that risk declines, a new danger is emerging to take its place: China. The fear is not of China's military might - Seoul and Beijing have developed a cordial relationship in recent years - but of the Asian giant's growing economic power and its implications for South Korea's slowing economy. Reflecting the prospect of economic domination by China, some language schools in Seoul report that demand for Chinese lessons is growing faster than for English tuition. South Korea's concern was brought into sharp focus last week when Beijing was granted entry into the World Trade Organisation, freeing Chinese manufacturers to offer fierce new competition in many of the global markets that South Korean companies inhabit. "South Korea is caught in a nutcracker between low-cost China and high-tech Japan," says Phillip Won hyuk-Lim, an economist at the Korea Development Institute (KDI), Seoul's leading economic forecasting and analysis organisation. In response to the threat, Jin Nyum, deputy prime minister and finance minister, has called a meeting of economic ministers later this month to draw up a strategy for coping with China's economic awakening. The ministers will discuss how core South Korean industries, such as semiconductor manufacturing, telecommunications and cars, can maintain their technological lead over Chinese rivals so they can stay ahead in quality terms even if they are undercut on price. Mr Jin warned last month that while China was three years behind South Korea in wireless technology it was catching up fast. The summit will also address concerns that China, as Asia's biggest and fast est-growing economy, could suck foreign investment away from South Korea. However, the government believes China's WTO entry is as much an opportunity as a threat, opening up a huge market that South Korean companies are well placed to serve through the two countries' cultural ties. The finance ministry has forecast that exports to China will increase by up to Dollars 1.5bn every year once trade barriers are knocked down. Samsung Electronics, the South Korean semiconductor and telecommunications equipment maker, expects to increase sales in China by 20 per cent over the next few years as an increasingly affluent consumer market develops in the country. Earlier this month, Samsung was chosen by China Unicom, a Chinese mobile operator, to help develop third generation wireless services in the country. LG Chem, a chemicals manufacturer, is also among the growing ranks of South Korean manufacturers setting up plants or joint ventures in China, to exploit the growing local market and the country's cheap labour. But many South Koreans are sensitive about domestic companies investing in China, fearing that jobs will be lost to Chinese plants and that technology and expertise will be transferred to China, helping it close the gap in quality. South Koreans are also concerned about the prospect of cheap Chinese imports flooding the domestic market. Last week, 10,000 farmers staged a violent rally in Seoul to protest about the WTO agreement in Doha, which they said would destroy the South Korean rice industry through reduced subsidies and lowered trade barriers. "It is true that Koreans are worried about expansion of the Chinese economy and the threat of cheap imports," says Kang Bong-Kyun, president of the KDI. "But I think we should be concentrating on the opportunity to supply 1.3bn Chinese on our doorstep rather than worrying about them supplying 47m Koreans." Copyright: The Financial Times Limited 1995-1998 _________________________________________________ KOMINFORM P.O. Box 66 00841 Helsinki Phone +358-40-7177941 Fax +358-9-7591081 http://www.kominf.pp.fi General class struggle news: [EMAIL PROTECTED] subscribe mails to: [EMAIL PROTECTED] Geopolitical news: [EMAIL PROTECTED] subscribe: [EMAIL PROTECTED] __________________________________________________
