LA LETTRE DU KOTRA Juin 2002 Centre Coréen du Commerce Extérieur et des Investissements
KOTRA PARIS - 36, avenue Hoche - 75008 Paris Téléphone : +33 (0) 142 25 09 57 - Télécopie : +33 (0) 142 25 09 50 - email : firstname.lastname@example.org M. Seong-Kuk Hong - Directeur Adjoint M. Frédéric Claveau - Responsable Investissements
S O M M A I R E¤ RELATIONS INTERNATIONALES ET BILATÉRALES Mais que savons nous de la Corée ? Korea seeking international cooperation through Foreign Trade Agreements ¤ POLITIQUE ECONOMIQUE, MACRO-ÉCONOMIE ET RESTRUCTURATIONS Cool Korea - how it roared back from disaster and became a model for Asia Ça tourne rond pour l'économie KDI calls for globalization Key sectors expected to continue growth ¤ SECTEURS ÉCONOMIQUES Management Korean business in transformation Tempête managériale à la coréenne Guide du savoir vivre en Corée Banque-financement IFC to invest $87 mil. In Korea's housing finance sector Technologies de l'information Corée du Sud, le pays le plus " branché " du monde Télécommunications Telecoms - the future is in South Korea Nokia ventures expands into Korea Two Koreas to cooperate in telecom sector Électronique GE, Siemens, Philips bid for Korea's Medison Transports : automobiles Imported cars face new notification system Alfa Romeo set to enter korean market Energie Bio-diesel station debuts in Incheon BTP-Acier Plant construction emerges as leading export item Paradise group to build leisure town near Incheon airport Steel industry to boost R&D investment ¤ ENTREPRISES COREENNES Daewoo Heavy Industries signs deal with John Deere ¤ ENTREPRISES FRANÇAISES Crédit Agricole Indosuez mise sur la gestion d'actifs au Japon et en Corée
- MAIS QUE SAVONS-NOUS DE LA COREE ?
Dossier réalisé par Frédéric FOLLIOT et Joëlle JACQUES
Au Pays du matin calme, Séoul est la troisième ville du monde, avec vingt millions d'habitants qui adorent vivre dans ces grands immeubles.
JEAN-ROBERT PITTE est professeur de géographie à l'université Paris IV. Il a effectué plusieurs missions de recherche en Corée et, dans le cadre de la Sorbonne, il est chargé d'une coopération avec l'université nationale de Séoul. Il encadre des thésards coréens en France et des thésards français en Corée.
- Comment sont les Coréens au quotidien ?
"Une fois que la glace est rompue, les Coréens sont très chaleureux. C'est un peuple touchant, attachant, où j'ai de vrais amis. Mais on est dans un pays confucéen (lire ci-contre), où les relations sont très formelles et où on a un sens aigu de la hiérarchie. Quand la confiance est établie, c'est définitif. S'il y a trahison, c'est redoutable ! C'est un peuple, plus encore que les Japonais et les Chinois, qui maîtrise sa violence, mais on sent qu'elle reste toujours sous-jacente. Il y a une vraie tension dans ce pays et dans tous les domaines : les affaires, les relations hommes-femmes... "
- A quoi cela tient-il ?
" A la mentalité, mais aussi à la colonisation japonaise - c'est eux qui le disent - et à la situation géopolitique très dure : la frontière de la Corée du Nord est à 30 km de Séoul, ce n'est pas rien. Il y a une vraie menace et une blessure dont on n'a pas idée en France, et qui est comparable à celle des Allemands de l'Est et de l'Ouest, avec des familles qui ne se sont pas vues depuis cinquante ans. Il y a une certaine sauvagerie en Corée : tout est exacerbé, jusque dans l'alimentation, très pimentée, très aillée. "
- Que ressentent les Coréens vis-à-vis des Japonais ?
" Il y a un véritable nationalisme, très fort, en Corée, avec notamment, cinquante ans après la guerre encore, une animosité envers le Japon qui a l'air de monter d'année en année et qu'on ressent beaucoup plus maintenant qu'il y a vingt ans. Cette animosité remplit de stupeur les Japonais. C'est comme si aujourd'hui, en France, on vitupérait encore contre les Allemands (on n'oublie pas ce qui s'est passé mais on peut pardonner sans oublier). En Corée, on a l'impression que les Japonais sont encore là ! Par exemple, les Coréens avaient à Séoul, en face du Palais royal, un musée national où se trouvaient les plus beaux trésors de leur culture. Mais cet énorme bâtiment avait été construit par les Japonais pendant la colonisation. Eh bien, à l'occasion du cinquantième anniversaire de la libération, en 1995, les Coréens ont fait une immense cérémonie pour enlever, avec une grande grue, la coupole du bâtiment, la déposer par terre, puis démolir complètement le musée dans les mois qui ont suivi. "
- Pourtant, la Coupe du monde se tient à la fois au Japon et en Corée...
" Oui, et c'est une idée assez surréaliste ! Moi qui suis géographe, je suis mêlé depuis des années à une querelle sur le nom de la mer qui sépare le Japon de la Corée. Sur les atlas, elle s'appelle "mer du Japon". Les Coréens veulent absolument qu'elle s'appelle "mer de l'Est", parce que sur des cartes anciennes, ça s'appelait "mer de l'Est" et que c'est à cause de l'occupant japonais que cela a été transformé en "mer du Japon"... On m'a demandé plusieurs fois à l'ambassade d'intervenir, j'ai organisé un débat entre des Coréens et des Japonais. Ma position est de dire : "Arrêtons ! Que l'appellation mer du Japon vous choque, je peux le comprendre, mais surtout pas mer de l'Est, puisque c'est à l'ouest du Japon, ça n'aurait aucun sens ! Appelez ça mer de la Sérénité ou mer de l'Amitié..." Mais il n'y a rien à faire ! Ils reviennent constamment à la charge ! "
- Est-ce grâce à leur caractère travailleur que les Coréens forment la onzième puissance économique du monde ?
" Incontestablement. C'est un peuple très travailleur, discipliné, qui, comme tous les peuples influencés par la philosophie de Confucius, aime apprendre, aime le savoir, la littérature, la poésie, la science. En Corée, on apprend à travailler dès l'enfance, dans la famille, à l'école. Les Coréens ont une vision optimiste du travail. Le travail fait partie de la vie des gens, le lieu de travail est aussi un lieu de convivialité. Ils vont dîner avec des collègues, partent en vacances et en week-end de randonnée dans la montagne avec des collègues. Chez nous, cela paraîtrait un carcan épouvantable. Chez eux, ça se passe bien et c'est agréable, les gens se lâchent et s'amusent. Mais, en même temps, on respecte la hiérarchie et on ne franchit pas les bornes. "
- Et la Corée du Nord, qu'en pensent les Coréens du Sud ?
" C'est l'horreur des horreurs, le régime instauré par Kim Il Sung. En même temps, ils ressentent une émotion extraordinaire. Il y a une zone démilitarisée de quatre kilomètres et on peut aller sur la frontière, et regarder avec des grosses jumelles de l'autre côté... Il y a des villages de propagande et des monuments pour les martyrs à la gloire des Coréens du Sud qui sont morts. Il y a des musées aussi, qui présentent à quoi ressemble la Corée du Nord ; c'est très curieux parce qu'il y a cette propagande anti-Corée du Nord très violente et, en même temps, ils présentent les objets de l'industrie du Nord d'une façon très touchante, des petits chaussons d'enfants faits en Corée du Nord... Les Coréens du Sud veulent connaître leurs compatriotes de Corée du Nord, ils sont fascinés, c'est le même peuple, la même région, la même mentalité... Beaucoup de familles ont été coupées en deux. Ils le vivent douloureusement. "
Propos recueillis par J. J.
Le monde tourne les yeux vers la Corée du Sud, où se déroule la Coupe du monde. Il voit un petit pays entouré de grandes puissances. Cinquante millions d'habitants et la onzième puissance économique du monde. Un pays confucéen, des relations très formelles, un sens aigu de la hiérarchie. Il voit aussi folie et passion, et une certaine " violence " chez un peuple meurtri par l'occupation japonaise et la séparation d'avec le Nord. Source : La Voix du Nord - 4/06/02
- KOREA SEEKING INTERNATIONAL COOPERATION THROUGH FTAS
Given its unique history - the country has been invaded some 800 times - Korea has traditionally not been a very big fan of international cooperation. For years, it shunned foreign investment and it did not seriously consider regional trade agreements (RTAs), a global trend in which two or more markets form special trade relationships.
The attitude toward RTAs has changed in recent years, however, amidst growing global enthusiasm for building regional blocs. According to the World Trade Organization (WTO), the number of reported RTAs around the world at the moment totals 240, with 70 percent or 172 of these in effect. Furthermore, of the total, around 100 have been concluded since 1995.
This spreading regionalism is attributed to the fact that cases of regional economic integration initiated by the U.S. and the European Union (EU) have resulted in various economic benefits, as seen in the success of NAFTA (North American Free Trade Agreement) and the EU, while attempts to liberalize trade through the WTO have been frustratingly slow.
The general benefits of FTAs include helping secure export markets, increasing foreign direct (FDI) investment and improving political relationships.
Spotting this international trade pattern, local trade experts began to argue that Korea - which along with China is the only country without a single FTA - should work to conclude mid- to long-term free trade agreements (FTAs), a form of RTA, with major partners such as Japan, the U.S., China and ASEAN (Association of Southeast Asian Nations) to obtain greater benefits, especially since Korea is thought to be disadvantaged by such factors as limited market size, weak trade share and structure and trade barriers from foreign markets.
"The spread of regionalism is expected to grow and deepen. Therefore, Korea should actively pursue FTAs with major trading partners to minimize potential losses that may result from being excluded from the worldwide trend of regionalism." Cheong In-kyo, senior research fellow of the Korea Institute for International Economic Policy (KIEP), wrote in a recent paper.
* Slow progress
Despite the government's belated acknowledgment of the need for Korea to form such exclusive trade ties, progress has been slow. The only market the country is seriously talking with about an FTA partnership at the moment is Chile, while negotiations with other important markets like Japan, the United States and the EU are still in their infancy.
Korea chose Chile as its first FTA partner because of their opposite harvesting seasons and because of their geographic distance, which minimizes chances of trade friction.
But the deal, initiated in 1998, has been at a standstill for three years now due to strong protests from Korean farmers who fear competition in the agricultural, particularly fruit, sector if Korea allows Chilean fruit to enter the market tariff-free.
Accordingly, the Korean government tried to secure the agreement without providing access to its fruit market. But Chile would not consider such an exception, arguing that its agricultural sector is one of its key industries.
Chile suggested instead that Korea consider a quota system for fruit, in which it establishes a quota for an appropriate amount for two to three years and then increases the cap gradually.
FTA with Chile is expected to boost Korean exports by $660 million and imports by $220 million, according to KIEP.
Aside from Chile, Korea sees Japan as the next most likely partner, especially considering the two countries' agreement to pursue FTA and the business investment treaty (BIT) signed late last year.
The forecast benefits of a Korea-Japan FTA far exceed those generated through an agreement with Chile, with KIEP predicting that the tie would boost Korea's GDP by 0.42 percent in the short-term and by 3.58 percent in the long-term. Profit-wise, the margin of increase is expected to reach $424 million in the short-term and $1.03 billion long-term.
But when and if the Korea-Japan FTA negotiations begin, even greater opposition is predicted on the Korean side, considering the two nation's dark history and because Japan appears to be more advantaged due to its larger market size and competitive characteristics.
Of all potential partners, though, Korean businesses' interest remains highest in the United States, as is proven by numerous surveys and studies.
According to one recent study by the Korea Economic Research Institute (KERI), out of 154 companies surveyed, 36.8 percent said they consider the United States the most ideal FTA partner, followed by China 29.3 percent, Southeast Asia 12.6 percent, Japan 8 percent, Latin America 6.9 percent and the EU 5.7 percent.
But FTA negotiations with the United States have made the least progress among all candidates, as the country has thus far been unresponsive to Korea's overtures. If signed, the FTA would help increase Korea's GDP by 0.69 percent and the U.S.' by 0.23 percent.
Even less likely to be realized in the immediate future among Korea's FTA candidates are agreements with the EU and Latin America, though trade experts like the Korea Trade-Investment Promotion Agency (KOTRA) refer to Mexico as the second best candidate for FTA ties with Korea after Chile, especially when considering its giant automobile market.
* Why FTA?
While the specific advantages predicted and the ongoing global trend may be reasons enough for Korea to speed up its FTA efforts, there are other crucial, and perhaps more urgent, reasons why Korea should participate in this particular method of trade.
The first is that FTA could lead to greater FDI, which has for several years now been one of Korea's top economic goals.
The best example of the effect of FTA on FDI is seen in Mexico, which is currently the most active FTA country in the world, having 10 FTAs with 32 countries.
Since the deals were made, FDI in Mexico has shot up from an average $12 billion a year to $25 billion last year.
"FTA has a number of benefits, one of the biggest of which is its effect on FDI. By providing huge markets like the United States, we were able to attract a number of foreign companies to Mexico," Mexico's Undersecretary for International Trade Negotiations, Angel Villalobos explained to visiting Korean press recently.
While Korea has been steadily attracting FDI since the 1997-98 financial crisis, it is still behind some other Asian countries like Singapore and Hong Kong, and the competition is expected to worsen due to China's lightening-fast growth as a market.
The second reason is that Korean exports overseas are being threatened by the trade cliques around the world. Those countries that have FTA allow tariff-free imports, while Korean goods are forced to continue to pay tax, thus making them less competitive price-wise.
In Chile, for example, Korean automobiles and electrical appliances possess number one market shares; one in four cars owned by Chileans are Korean electrical appliances boast market shares of between 38 percent and 91 percent.
But things will change beginning next year, particularly for automobiles. Due to the FTA Chile signed with the European Union, vehicles coming into Chile from the region will be tax-free. Chile is also looking to conclude an FTA with the United States by the end of the year and form tariff-free auto trade with Brazil and Argentina, giving an advantage to firms like General Motors and Volkswagen that manufacture cars in Brazil.
By contrast, Korean vehicles going into Chile will have to continue paying 6 percent tax.
"A 6 percent tariff converts to about 10 percent consumer price. This means Korean cars will lose their price competitiveness in Chile," KIEP director Choi Nak-gyoon said, predicting that this may result in reduction of about 2,500 units, or $150 million worth of auto exports, to Chile per year.
Korea is faced with a similar dilemma in Mexico. The Latin American country signed the NAFTA with the United States and Canada in 1994. With this agreement, industrial products (cars 2004) from the two nations can enter the Mexican market tariff-free.
Korean goods, on the other hand, continue to pay more than 10 percent tax.
The problem is even more serious when considering Mexico is currently pursuing FTA with Singapore and Japan, having already launched a joint investigation with Japan last year.
The third main argument for FTA is that it is very closely linked with Korea's dream of becoming a regional hub for multinational corporations (MNC). Considering Korea is said to have handicaps like low English-language skills, relatively limited market size and lower-than-international-level regulations, it is the general opinion that it should at least offer entrance to other markets.
Countries like Singapore and Malaysia are already employing FTA to promote their cities as ideal regional MNC headquarters. Singapore, for example, boasts that it offers low tax rates for exports out of the country as it has free trade agreements with three markets, including Japan and New Zealand.
With such programs, the Singaporean government is attempting to attract 300 more Asian regional headquarters for MNCs by 2010, Han Joon-woo, director and regional CEO of the KOTRA Singapore office said.
Malaysia also said that it will be an even more attractive market than its competitors in the future with the establishment of the ASEAN Free Trade Agreement (AFTA) by 2003, when intra-regional tariffs will be reduced to a minimal level of between zero and 5 percent, according to the Malaysian Industrial Development Authority (MIDA).
* Not a zero-sum game
As one of the most active pursuers of FTAs in the world, Mexico has much to say about the theories, benefits and side effects related to regional trade cooperation.
One of the most practical, however, may be a comment by Villalobos: "A free trade agreement is not a zero sum game. Instead of trying to win all and lose nothing, the strategy is for each partner to find ways to make the most of the deal."
Many say that Korea should take a lesson from the remark and reconsider its "win all and lose nothing attitude."
Mexico again proves and excellent illustration of this. Though its 10 FTAs have brought it many benefits like increased trade (60.7 percent of total GDP in 1997 but 72.3 percent in 2000), exports (rising an average of 14.6 percent per year), FDI, employment (30 percent higher for NAFTA-related firms) and improvement of the firms' competitiveness (number of exporting firms expanded from 21,000 in 1993 to 36,000 in 2000), it is also said to be suffering some damage as a result of NAFTA.
Among the injuries are over-dependence on the United States for exports (89 percent of total); stiff competition in the agricultural sector, particularly for grains and vegetables; and unintentional advantages given to foreign firms in Mexico.
But in line with the "FTA is not a zero-sum game" philosophy, Mexico has learnt to deal with the disadvantages and curb injuries to a minimum, rather than shunning the trade agreements altogether.
"We are experiencing some disadvantages, but are constantly looking for ways to minimize their effect. For example, to make sure that our economy is not too dependent on the United States, we have been very actively pursuing FTA with other nations. As a result, the European market helped us a great deal when the U.S. economy was suffering after the Sept. 11 crisis. Our future partnerships will help us likewise," Villalobos said.
"In Korea, there is a tendency to emphasize the negative effects of FTA despite the fact that the positive effects of such agreements far exceed the negative ones," said KIEP's Cheong.
* Chile challenge
Accordingly, some opinion leaders say that Korea should follow Mexico's example in dealing with Chile. While it is true that the Korean agriculture sector may be harmed by Chile's high quality, low-priced fruit, it has much to gain, particularly in Chile's auto and electronic products market.
"There are no problems in Chile for companies like Daewoo, Hyundai and Samsung - Korea should allow imports as well. Apple, pear and grape are leading export items for Chile and we cannot exclude the items from the agreement just as Korea cannot exclude cars," Osvaldo Rosales, general director for International Economic Affairs, said.
"Furthermore, FTA always produces positive results. It's good for all parties in the long term. If there are imports, there will be new opportunities for exports," he added.
Rosales said that the farming sector is important for the Chilean economy because it is the chief generator of employment and it gives the market a comparative advantage. Chile exported about $1.115 billion (grape 50.5 percent, apple 20.6 percent, pear 5.2 percent) worth of fruit in 2001.
Yet another reason for Korea to clinch an FTA with Chile is because although it seems very unlikely that Chile will agree to an FTA with Korea without the fruit market, if Korea fails to succeed at this first attempt, the nation's image may suffer as the international community begins to see it as a "tough and unreasonable partner."
Korea currently only imports grape and kiwi fruit from Chile, with a 47.5 percent tariff charge (non-fruit products have 17 percent tax). Each took up 1.4 percent and 3 percent market share, respectively, in 2000, according to the Chilean Exporters Association.
* Mexico's know-how
So, how can Korea control negative public sentiment to pursue FTA? Again, Mexico provides instructive clues.
According to Undersecretary Villalobos, one of the most important aspects of FTA is cooperation within one's own country. Therefore, it is important that the government include the public sector in the FTA discussions from the very first stage.
"We (Mexican government) launched studies on the impact of an FTA on each industry before we launched each of the agreements. Thus, during the research phase, we already establish a working relationship with the industries and by the time the negotiations start, we are already partners working for the same goal," he explained.
In addition to establishing such cooperation, the Mexican government is also careful about deciding on tax reductions for an FTA partner, particularly in those industries that are expected to see some disadvantage from the relationship.
"Furthermore, we carefully monitor the foreign companies to make sure that they don't take advantage of the FTA so that the domestic firms suffer as a result. It is such an attitude of our government that helped us to successfully conclude so many FTA," Villalobos said.
"FTA, after all, is something that affects each sector differently. Accordingly, it is not only important that we try to help those sectors that are hit worst by a specific FTA, it is crucial that a country forms other FTAs with different markets to ensure that the disadvantaged industry in this FTA will see some advantages in another," he added.
(email@example.com) By Kim Mi-hui Staff reporter - Source : Korea Herald - 2002.06.14
- COOL KOREA - HOW IT ROARED BACK FROM DISASTER AND BECAME A MODEL FOR ASIA
Swing by the high-fashion enclave of Chongdamdong on any Saturday night, and you'll see the affluent twentysomethings of Seoul chattering away on their pastel-colored mobile phones. Chic Korean women float by, bedecked in Chanel, Hermes, and Gucci. Later on, the dance clubs throw open their doors, making the very sidewalks reverberate into the early hours. Everywhere, you see billboards and posters proclaiming the coming World Cup, which South Korea is hosting with Japan. The planet's biggest sporting event is an excellent excuse to throw a nationwide party. The question is whether the Koreans will notice. Their party has already started.
To foreigners who know the ravages that the Asian crisis inflicted on Seoul, it's hard to believe this is the same capital that sprouted tent cities and soup kitchens in 1998. Or the town that, for decades, maintained a rigid culture of conformity, drudgery, and xenophobia. Koreans are rubbing their eyes, too. When 47-year-old Eric B. Kim returned to Seoul in 1999 to head marketing for Samsung Electronics after 32 years in the U.S., he felt a bit like Alice after falling through the rabbit hole. "The old hierarchy was gone," he says. He thought his two children would find Korean culture stifling. Instead, they think Korea is almost as much fun as--brace yourself--Southern California and the U.S. East Coast, where they grew up. "Koreans," says Kim, "are thriving on change."
The changes have been pretty much nonstop since the economic trauma of 1998, when gross domestic product contracted 6.7%. Today, Korea is back with a vengeance. Its economy grew 5.7% in the first quarter. Its phones, cars, and movies are hot around the world. Its citizens are riding a high verging on cockiness.
Dare we say it? Korea is cool. This country of 48 million has become a model for developing nations everywhere. Nowhere is this more true than in its home region, where Japan is a waning force and much of Southeast Asia continues to struggle with sick banking systems and dwindling foreign investment. The commentators may be right that the future belongs to China--and that Korea itself still needs to keep reforming. But Korea has already made the transition from authoritarianism to democracy and from a low-end, exporting economy sealed off from the world to one that is plugged-in, dynamic, and increasingly high-tech. It will be some time before China gets there.
Many other Asian nations, looking on enviously, see in Korea what they can only dream of: a budget surplus, $107 billion in foreign-currency reserves, a rising credit rating, and a jobless rate of 3.1%. The Korean stock market is among the best-performing in the world. Some $52 billion worth of foreign direct investment has poured into the country during the past four years, vs. $24.6 billion over the past three decades. Compare that to the situation just before the crisis, when the KOSPI index was crashing, exports and dollar reserves were collapsing, and foreign investors fleeing, and you'll get a sense of how much has changed.
How did crisis-afflicted Korea transform itself? Will it keep its prosperous new model alive? Answers to those questions provide a clue to how a country can really change, and whether Asia needs to follow the Korean way to a new level of economic flexibility and vitality.
The answer to that first question is complex. First, President Kim Dae Jung and his advisers managed to cut the connection between Korea's banks and the chaebol, the conglomerates that once ruled Korea. Second, the Koreans created an economy that did not depend exclusively on exports to survive. They fashioned a full-fledged domestic economy, a rare thing in Asia. Third, the trauma of crisis and change unleashed a wave of innovation in business and culture that is still in effect.
Much of this wouldn't have happened without the administration of President Kim--although these days, his own electorate doesn't give him much credit. The longtime political reformer, who endured assassination attempts, jail terms, and years of exile, had been waiting half his life for the opportunity to lead his nation in a new direction. When he finally made it to the presidency in 1998, Kim and his lieutenants realized that the crisis, although painful, offered an historic opportunity to overhaul Korea's economic model. Says the President: "You have to endure until the structural changes are complete. In this age of globalization, you have to accept that only profitable and competitive companies survive."
Kim & Co. ordered the overextended, state-backed conglomerates known as chaebol to go on a crash corporate diet, slash their debt, swap noncore businesses, and sell off others. "The chaebol served as a convenient whipping boy that could be blamed for the crisis," says Chung Hoon Mok, a former director of the World Bank, which, along with the International Monetary Fund, helped Korea with a $30 billion bailout package. Using the IMF's demands for reform as political cover, the government pressured chaebol chieftains to cut their empires down to size. At the same time, the administration threw open the economy to foreign competition and investment. Now, says Deputy Prime Minister and Finance Minister Jeon Yun Churl, "even hostile mergers are allowed."
Today, Korea's business landscape stands radically transformed. Of the 30 biggest chaebol, 16 have been shut down or radically downsized. The survivors--companies such as Samsung Group and LG--barely resemble their former selves. Of the 2,100 financial institutions cluttering the banking industry in 1998, just 1,600 are now standing. Of 24 major city banks, only half remain. Imagine such ruthless restructuring in Japan.
With many of the chaebol gone, the newly vital banks had billions in capital freed up for new loans. Korean consumers and small businesses, starved of money for decades, finally had the liquidity they so desperately needed. With banks free to lend to whomever they want, small and midsize startups have proliferated; since 1998, 11,396 have popped up. Says Yang Ki Gon, president and CEO of Bellwave Co., a small mobile-phone maker: "New startups like us give dynamism to the economy."
At the same time, banks are lending to consumers through credit cards and mortgages, setting in motion a spending boom that is giving the economy a healthier balance between exports and domestic-led growth. This new economy has already shown its strength: Last year, when the rest of Asia was flat on its back after the U.S. economy swooned, the Koreans chugged on, producing a respectable 3% gain in GDP during a hard year.
The change in the way Koreans deploy capital seems to fit perfectly with a shift in the way Koreans think about themselves. It's as if a whole new Korean value system has emerged. The crisis unleashed pent-up entrepreneurial energy. The most promising trends--the rapidly expanding information-technology sector, a more fluid labor market, a better balance between export-led and home-driven economic growth--are being fueled from below by consumers instead of being orchestrated by bureaucrats.
Indeed, the whole notion of success in Korean society has come in for serious revision. Making a quick fortune in business and finance is no longer viewed as suspect or even criminal. Nor do Koreans covet entry-level jobs at the biggest corporate names in Korea--the Samsungs, the LGs, the Hyundais. In such companies, "people think and behave in a uniform manner. I hate it," says Jo Seong Hun, 31, a manager at the merger-and-acquisition firm SYM & Associates. Today, many young Koreans want to work at companies such as MP3 maker Digitalway, or NCSoft, whose online medieval-fantasy game Lineage has a cult following among global gamers.
The desire to create has spilled over into popular culture, which is becoming increasingly accessible to overseas audiences. Sixteen-year-old teen pop diva BoA's first album, Don't Start Now, has dominated the charts in Japan this year. The male dance duo Clon rules in Taiwan. And H.O.T., a boy band that blends hip-hop, R&B, and dance music, is big in China.
In film, producer Shim Jae Myung made a splash two years ago with his smash hit Joint Security Area, a North-South military drama that drew 6 million viewers at home and did well in Japan. Korea's domestic film industry has doubled its annual box-office revenues, to more than $380 million, since 1997, and now boasts a 51% share of the market. "I used to think Korean films were a waste of time," says Lee Jee Min, 24, who works at SEI Asset Korea, a fund manager. "But they are pretty good these days." Walt Disney Co.'s Miramax Films (DIS ) unit recently paid $1.1 million for the rights to remake a Korean film called My Wife Is A Gangster. "We hope the boom in the movie industry will spread to other content businesses," says Park Byoung Woo, deputy director at the Culture & Tourism Ministry's Film & Video Division, which provides seed money for new films.
Korean celebrities are being wooed by Asian companies looking for spokespeople. TCL, a Guangdong-based mobile-phone maker, for example, has been featuring the hot Korean actress Kim Hee Seon on billboards in major Chinese cities. TCL signed the 26-year-old heartthrob to a two-year modeling contract worth $1.2 million, plus production expenses.
It's not just Korean culture that is winning newfound respect. In the U.S. and other markets, Samsung consumer electronics and Hyundai nameplates are no longer a fallback for those who can't afford a Sony (SNE ) or Toyota (TM ). A decade ago, Samsung barely registered as a global brand. Now, it's going head to head with Sony Corp. and Nokia Corp. for leadership in high-end, Internet-surfing mobile phones, digital televisions, MP3 players, liquid-crystal displays, and the like.
While Korean companies were content to pump out uninspired knockoffs before, they are now producing cutting-edge products. At Samsung, Chairman Lee Kun Hee launched a design revolution, in part by bringing in former IBM design wunderkind Tom Hardy to get designers thinking outside the box. Key Samsung designers also worked with the U.S. firm Sapient to clear out the cobwebs. "In the past, technology was the driver of new products," says An Yong Il, who runs Samsung's product research. "But now, design has taken over."
Global investors like what they see. Samsung's $48 billion market capitalization is bigger than such Japanese national champions as Hitachi, Fujitsu, and Toshiba. "We have achieved No. 1 status in a lot of flagship categories" including Internet-linked and voice-activated phones, LCDs, and high-end flash memory chips, says Kim, Samsung's marketing chief. He thinks that by 2005, the Samsung and Sony brands will be interchangeable in the minds of consumers.
Witness how the Koreans came out of nowhere to grab a market-leading 55% of the rapidly expanding global market for MP3 players, which let users play music downloaded from the Net or tunes copied from CDs. Digitalway, launched in 1998 by a group of former Samsung engineers, has managed to snag a 30% share of the U.S., Japanese, and Asian markets. Digitalway Chief Executive Woo Jung Ku thinks the Koreans have a big edge over China in the digital age because of their growing comfort with product and software design. Besides, Koreans' love of the Next Big Thing means rapid product turnover, consistent profits, and pumped-up innovation.
Finally, Korean consumers are infomaniacs, and they love to interact with Korean companies online. Digitalway receives about 100 e-mails a day from consumers with praise, complaints, and suggestions for new features for its array of lightweight and snazzy MP3 players. "We have a big and wide following of consumers on the Internet," says Woo, adding that the networking effects of a wired society are changing the game in consumer electronics.
Even pockets of old industrial Korea are being revived, thanks to foreign capital and managerial talent. Back in 1998, the Swedish industrial giant Volvo bought the money-losing construction-equipment arm of the Samsung Group in a $572 million deal. The Swedes fired 22% of the workforce, refinanced the debt, narrowed a lineup of 13 products down to one--excavators--and focused on profits, not market share.
Volvo also moved its entire global excavator operation out of pricey Sweden to lower-wage Korea. Last year, Volvo Construction Equipment Korea posted a $42.3 million profit on $415 million in sales. Some 70% of its revenues come from exports, vs. 30% under Samsung. Kim Hee Jang, a manager who survived the job cuts, says he is working harder than ever but finds the work environment far less formal and hierarchical. "I think I would feel as if I were suffocating if I went back to the old chaebol style," he says.
If such stories can be replicated on a major scale, Kim's strategic vision of turning Korea into a North Asian global hub and export platform for foreign multinationals could get interesting. One big edge is Korea's proximity to the fast-growing Chinese market. Another is the billions that the government and private sector have poured into wiring the nation with broadband fiber optics. The country's 25 million Internet surfers and 30 million mobile-phone users make it a unique market to try out new content services and wireless technologies. And Korea's manufacturing capacity and chip expertise add up to the "perfect environment" for Korea to emerge as an information-technology research and development center, says Ko Hyun Jin, Microsoft Korea's general manager. Already, Nokia (NOK ), Sun Microsystems (SUNW ), and Oracle (ORCL ) have major operations in South Korea.
Can Korea bury the past? Vestiges of the old Korea remain. Labor unions are still restive, and some chaebol operations are walking-dead companies--virtually worthless but still draining bank funds, especially government-guaranteed loans. There are thousands of small and midsize manufacturers that still aren't competitive by global standards. And the current influence-buying scandals involving two of Kim's three sons are a stark reminder of Seoul's gold-plated political corruption. Kim, who is in the final year of a five-year term, hasn't been implicated and has apologized. But he is feeling the heat. His approval rating is hovering around 20%, down from 80% four years ago.
If Koreans elect a new president who is indifferent to the need for more reform, there's a risk that this Korean miracle could yet stall. Still, veterans of many an Asian crisis think Korea has turned a corner. "Once you let the genie out of the bottle," says IMF resident representative Paul F. Gruenwald, "it's hard to put back in." The credit belongs to the Koreans themselves. After a huge social shock, they sucked it up, got back to work, embraced new technologies with relish, and started enjoying life again. First the pain, then the gain.
By Brian Bremner and Moon Ihlwan in Seoul - Source : Business Week on line - 10/06/2002
- ÇA TOURNE ROND POUR L'ECONOMIE
Ereintée par la crise financière de 1998, la Corée du Sud, qui accueille ce mois-ci, avec le Japon, le Mondial 2002, tient aujourd'hui sa revanche. Il reste pourtant du chemin à parcourir pour ce pays, envié par ses voisins pour ses performances économiques, avant de réaliser son rêve : devenir le centre de gravité de l'Asie du Nord-Est.
La passion du foot, c'est bien. Mais si l'on peut en profiter pour mettre en avant ses charmes économiques, c'est encore mieux. Le gouvernement de Séoul, qui organise, avec Tokyo, le Mondial 2002, n'a pas manqué de joindre l'utile à l'agréable en organisant, juste avant le lancement de l'événement, une table ronde avec une quarantaine de chefs d'entreprise d'envergure mondiale. A l'ordre du jour de cette réunion : comment la Corée du Sud peut-elle devenir une plaque tournante économique en Asie du Nord-Est. Pour "The Korea Herald", cet objectif est devenu un véritable "paradigme" chez les responsables politiques, et a toutes les chances de devenir réalité. Ce pays de 48 millions d'habitants présente, de fait, beaucoup d'atouts, fort d'une position géographique avantageuse, d'un des plus importants ports du monde, d'une population bien formée, de solides infrastructures industrielles dans le secteur de l'électronique et l'automobile.
Le jour même de l'inauguration du Mondial, la presse coréenne semblait fière d'annoncer quelques prouesses économiques dans ces secteurs clés - sans doute pour conjurer à l'avance de probables déconvenues footballistiques. "La Corée est devenue numéro un pour l'usage de l'Internet à haut débit", titrait "The Korea Times". Alors que ce nouveau système de connexion Internet ultrarapide peine à s'imposer aux Etats-Unis et ailleurs, il explose dans la péninsule, avec 10 millions de foyers connectés d'ici à la fin de l'année. "Hyundai devient le numéro 9 mondial des constructeurs automobiles", dépassant pour la première fois Fiat et Renault, s'enorgueillait encore le quotidien.
* Un pays qui revient de loin
Le diagnostic, consensuel, des PDG invités à Séoul est pourtant nuancé. "Beaucoup de travail a été fait par le gouvernement coréen pour stabiliser l'économie et relancer l'investissement direct étranger, mais il reste encore beaucoup à faire pour que la Corée se transforme en pôle d'attraction pour les affaires dans l'Asie du Nord-Est", résume "The Korea Times". Les conseils sont allés bon train. Il faudrait stabiliser le won par rapport au dollar, améliorer les conditions des expatriés étrangers, abaisser les barrières culturelles... Un responsable de Procter & Gamble, cité par "Chosun Ilbo", a aussi averti que la Corée du Sud ne verrait son crédit augmenter qu'à condition d'adopter une simplification de la réglementation sur les investissements, ainsi qu'un renforcement de la propriété intellectuelle pour lutter contre la multiplication des contrefaçons.
Foin des recommandations, les chiffres sont déjà prometteurs, cités par "Business Week" : 52 milliards de dollars d'investissement étrangers directs se sont déversés sur la Corée ces quatre dernières années. Auparavant, seuls 24,6 milliards de dollars étrangers avaient été investis en trois décennies. C'est un fait, la Corée du Sud est devenue fort attrayante. Et elle revient de loin. C'est ce parcours sur lequel s'attarde "Business Week". L'hebdomadaire américain fait sa couverture sur cette Corée "cool", qui s'est extirpée du "désastre" pour devenir un "modèle pour l'Asie".
* Mauvaises manières
"Les visiteurs qui savent quels ravages la crise économique asiatique a infligé à Séoul, peineront à croire qu'il s'agit là de la capitale qui, en 1998, multiplia les abris de fortune et les soupes populaires. Ou que cette ville maintint, pendant des décennies, une culture rigide de conformité, de corvées et de xénophobie." Aujourd'hui, l'enclave chic de Séoul, Chongdamdong, où les portables rivalisent de couleur pastel et où les femmes arborent ostensiblement leurs accessoires Chanel, Hermès ou Gucci (des copies ?), est emblématique d'un pays en pleine mutation, où l'explosion de la consommation soutient la croissance. "Les Coréens ont créé une économie qui ne dépend pas exclusivement des exportations pour survivre, note le magazine. Ils ont façonné une économie domestique autonome, ce qui est rare en Asie."
La crise de 1998 semble finalement avoir eu un effet salvateur. Elle aurait, selon "Business Week", provoqué en réaction une "vague d'innovation dans l'économie et la culture". Une série de réformes a notamment ouvert l'économie sur l'extérieur et permis le déclin des immenses conglomérats longtemps soutenus par l'Etat : les chaebols. Alors que le Japon n'en finit pas de s'affaiblir, beaucoup de pays asiatiques regardent désormais avec envie les performances coréennes : un excédent budgétaire, un taux de chômage de 3,4 %, une des Bourses les plus performantes au monde...
La Corée doit beaucoup de ces réussites au président Kim, arrivé au pouvoir en 1998, soutient l'hebdomadaire américain. Pourtant, ce réformateur est poursuivi par les mauvaises manières héritées du passé : le système politique et la bureaucratie demeurent englués dans les scandales de pots-de-vin. Mais la jeunesse au travail semble, elle, avoir définitivement tiré un trait sur les anciennes moeurs : elle préfère en majorité éviter les grosses entreprises jugées trop rigides, note "Business Week". Et quand elle est au chômage, elle ne semble plus trop stressée : 35,7 % des hommes chômeurs interrogés préféreront suivre un match du Mondial plutôt que d'aller à un entretien d'embauche... La jeune génération ne souffre pas réellement de problèmes économiques, note "The Korea Times", et elle préfère en tout cas assister à des événements sportifs plutôt que de chercher du boulot. La Corée du Sud aurait-elle déjà fait sien le modèle occidental ?
Article repris par "Le Monde" (édition datée du 4 juin 2002) - Source : © Courrierinternational.com juin 2002
- KDI CALLS FOR GLOBALIZATION
A state-run think tank has called for the government to actively pursue wider opening and restructuring of the economy and refrain from borrowing too much for too long to stimulate the economy.
In a report on the lessons from the 10-year economic doldrums in Japan, the Korea Development Institute (KDI) said Friday that Japan's closed-door economic system, in which businesses, the national and provincial governments and customers are closely intertwined among themselves to block the inflow of foreign companies, served as the major hurdle to the drive for Japan's globalization.
"Japan has established a full-set principle in which Japanese firms produce all the products in defiance of the international division of labor," the report noted. "Such a post-World War II manufacturing system based on closed-door cooperation among economic entities within Japan effectively banned inflow of foreign firms."
"The closed-door economic system, however, could not go hand in hand with the digitalization of the world in which global and regional economies are closely intertwined and telecommunications and other state-of-the-art technologies are developing rapidly," the report said.
"Just as we see in Japan in the 1990s, any sudden collapse of the closed-door economy will not only trigger deflationary pressures but also undermine growth momentum," the report said. "Substantial openness of the services and small- and medium-sized industries on a gradual basis, therefore, is essential for successful corporate and financial restructuring of the local industries."
The report also pointed out that the Japanese government borrowed too much to allow its debt to gross domestic product ratio to exceed 130 percent recently from a decade ago when the ratio was less than 50 percent.
"The expansionary budget policy could be justified only when it takes effect on a short-term basis," the report said, warning against the chronic use of an expansionary budget to boost the economy without financial and corporate restructuring will only undermine the fundamentals of the economy.
Another major factor in Japan's failure to pursue economic restructuring is the lack of a preemptive interest rate policy by its central bank, the report said.
"Japan's rate policy failed because of the fact that the Japanese central bank had already lowered the overnight call rate to the unprecedented 0 percent from 8 percent in 1991," the KDI report said.
The report said the belated overnight call rate cuts could not catch up with deflationary pressures and simply exhausted the government's tools for economic stimulus.
With the Tokyo government exhausting both its budgetary and monetary policies to help boost the sagging economy, the value of Japan's stocks and real estate fell one third from past decades, the report noted.
"Fortunately, South Korea did not follow Japan's problematic economic policies," the report said, stressing the need for the government to continue to undertake corporate and financial restructuring, aggressively pursue globalization of the economy, take a preemptive interest rate policy and shift swiftly to belt-tightening budget policy when need arises.
Source : Korea Times - 08/06/02
- KEY SECTORS EXPECTED TO CONTINUE GROWTH
Supported by active facility investments and strengthening exports, most of Korea's key industries will continue to experience growth in the second half of the year, recovering from the general slump last year, the Korea Chamber of Commerce and Industry (KCCI) said yesterday.
According to the chamber's report on key sectors' first-half performance and prospects for the second half, other positive factors include the global economy's comeback and robust domestic demand, which will help boost industries like electronics and semiconductors.
In the domestic market, the KCCI report forecast that the general machinery sector will grow 13.3 percent year-on-year in the second half, reflecting a hike in facility investment. The growth estimates for other sectors were 9 percent for electronics, 6.9 percent for petrochemicals, 5.8 percent for steel and 2.3 percent for oil refining.
By contrast, textiles (-6.8 percent), construction (-2.8 percent) and automobiles (-0.5 percent) are expected to suffer a setbacl due to dissipation of World Cup-related special demand, the government's efforts to stabilize the housing market and the planned termination of a cut in excise tax on automobiles, the report said.
The environment for export is especially upbeat, with semiconductors expected to swell by 110.0 percent, electronics 27.5 percent, general machinery 20.4 percent and textiles 17.5 percent.
Exports of steel, on the other hand, will continue to be slow, as markets like the European Union continues to control imports of foreign goods.
Production in the second half will also be healthy, thanks to a hike in domestic demand and strong exports. Forecast output rise for each sector is 89 percent for semiconductors, 17.6 percent for electronics products, 12.9 percent for textiles and 10.9 percent for general machinery.
"It is true that Korea's industries are improving, but it may be too early for us to become complacent, considering existing negative factors like trade conflicts, strengthening won and the slower-than-expected economic recovery in the United States," a KCCI official said.
"Accordingly, the government should come up with a plan that will ensure that the local companies continue to invest in facilities and work to increase exports," he added.
By sector, the KCCI report said automobile's production and domestic consumption in the first half rose 10.1 percent and 21.6 percent, respectively. In exports, most noticeable change was the 1.5 percent growth in North American market, KCCI said.
In the second half, production is seen to stop growing after 3.8 percent, with domestic consumption declining by 0.5 percent and exports rising 5.0 percent.
In electronics, production and domestic consumption each grow by 4.6 percent and 7.1 percent, respectively, due to special events like World Cup, while exports climbed 5.8 percent as worldwide demand for mobile communication handsets and monitors jumped.
As the global IT market recovers and demand for digital products continue to balloon, KCCI predicts exports, production and domestic demand of electronic goods will rise by 27.5 percent, 17.6 percent and 9.0 percent, respectively.
On the other hand, semiconductor production and exports shrank by 9.3 percent and 6.5 percent, respectively, in the first half due to over supply and trailing demand for PC. Both production and exports are seen to skyrocket by 89 percent and 110 percent, respectively, in the second half, though.
General machinery production and domestic consumption grew by 6.4 percent and 5.4 percent, respectively, and exports 0.2 percent as shipping to Japan, the United States and China became active.
Production, domestic demand and export are forecast to increase by 10.9 percent, 13.3 percent and 20.4 percent, respectively.
Fiber production and export slipped by 4.8 percent and 8.0 percent, respectively, while domestic consumption climbed by 17.7 percent in first half.
Production, export and domestic consumption is forecast to record 12.9 percent growth, 17.5 percent growth and 6.8 percent decrease, respectively.
Steel production and domestic consumption rose by 2.6 percent and 12.7 percent, respectively, in first half, while exports dipped 13.0 percent due to trade barriers. In the second half, production and domestic consumption are expected to inch up 2.4 percent and 5.8 percent, while exports continue to fall at 3.4 percent.
Shipbuilding's production and exports are predicted to escalate 3.9 percent and 11.2 percent, respectively, in the second half after having posted 12.7 percent and 1.4 percent improvements in the first half.
Petroleum sector's production, domestic consumption and export are all expected swell by 2.6 percent, 2.3 percent and 1.0 percent.
Petrochemicals' production, export and domestic consumption are forecast to grow 5.0 percent, 2.9 percent and 6.9 percent.
The Construction industry, meanwhile, will fall by 2.8 percent due to a slowdown in building activities, the chamber said.
Source : Korea Herald (2002.06.12)
- KOREAN BUSINESS IN TRANSFORMATION
New structures are in place to ensure significant and lasting changes in the way Korean business operates.
Korean businesses are currently taking on a radical transformation and are further strengthening their competitiveness, while they are working to lower their debt ratios and improve their financial structures. Both company transparency and management structures have improved. Korea is also producing the world's best top ranking products in the field of DRAM semiconductors and TFT-LCDs. Samsung Electronics, placed below 200th in corporate size according to a 2001 global ranking of companies based on market valuation, has since jumped to 85th position this year. Hyundai Motors and Kia Motors increased their shares in the world market for medium-sized cars and also increased their share of the United States market to the 2-percent mark.
Despite these advances there are challenges still ahead for Korean business. Below is an overview of the some more pressing issues concerning Korean business practices and transparency.
James D. Wolfensohn, president of the International Bank for Reconstruction and Development, or World Bank, wrote to the Korean Minister of Finance and Economy saying that "Korea's financial standards are by far the best maintained of all Asian countries." In the same vein, Sir David Tweedie, chairperson of the International Accounting Standards Board during his visit to Korea last March commented that he was "Very impressed at the effort to improve Korean accounting standards."
The actual application of accounting standards has changed greatly. One chartered accountant commented that companies are trying to increase their profits in every possible way, but they are being examined very closely. The drive to improve transparency was instituted at the same time as the threat of sanction by the supervisory authorities to eradicate the practice of "window dressing" accounting statements by large enterprises. The threat of disciplinary action was issued to all Korean chartered accountants following the discovery in 2000 that SanDong, an accounting subsidiary of KPMG Korea had concealed losses by the Daewoo Group totaling 23 trillion won. As a result, the firm was closed down.
The lack transparency of Korean business is due to the web of cross-debt guarantees woven between affiliate companies to finance internal transactions for the benefit of major shareholders. The result of which an under valuation of Korean companies referred to as the "Korean Discount." It is anticipated that once the cross-guarantees are finally disentangled, internal transactions will decrease, transparency will increase, and the problem of the Korean Discount will abate.
The impact of enhanced transparency does not stop here. The measure of transparency is whether or not the signals that are given off to allow enterprises borrow money or issue bonds and shares is accurate. Professor Su-Young Kwon of the Korea University School of Business Administration explains that "Accounting information has to be accurate so that loans and investment decisions can be made with confidence," he said. "If transparency can be enhanced, we can at least stop money being thrown down the drain."
There now appears to be a consensus among overseas fund managers and financial analysts that Korean management practices have improved along with transparency as business has focused on core areas of competence. The Federation of the Korean Industries (FKI) has stated that "Korean management structures and practices by far exceed global standards."
However, this is no reason for Korean business to rest on its laurels. Interested parties cannot be replied upon to maintain international standards of management practice. This can only be achieved by continuous monitoring, especially since these standards have only recently begun to take root.
Critics claim that much lip service is paid to these standards, which in reality are not applied. They point out that hostile mergers and acquisitions have not materialized as anticipated, the participation by outside directors in company management has turned out to be low-keyed and minority shareholders tend not to exercise their voting rights. The only case where a successful lawsuit has been launched by minority shareholders against a board of directors, they say, was that involving Samsung Electronics.
Professor Kim Sang-Jo of Hansung University said, "While external directors and minority shareholders have not made their voices heard, chaebol management structures, centered around the heads of business groups, are becoming stronger." Citing LG Chemicals as an example of insider trading by major shareholders he said that, "The management's thoughts and actions basically have not changed."
Professor Jang Ha-Sung, also of the Korea University School of Business Administration commented that "Although management practices and structures have improved greatly, we started off from the minus-3 mark, and we've since only achieved the plus 3-mark on a scale of one to 10." He also explained that, "Although the external director and inspection committee systems along with others have been introduced and insider trading has decreased, the degree of centralized control has only increased." However, there are signs that the once contentious issue of chaebol taking over banks is now receding.
The improvement in management structures will help business run more smoothly, but clearly more is required. It is, for example, questionable whether the CEOs of Korean joint-stock corporations are sufficiently competent in terms of international competitiveness given the degree of control wielded over them, often arbitrarily, by powerful stockholders. Such a situation gives one pause for thought as to whether the current generation of CEOs has the wherewithal to generate sustainable economic growth.
In the meantime, major domestic businesses performed quite well in the first quarter of this year. According to SK Securities Co. Ltd., the sudden upsurge in first quarter net profits by the domestic businesses may be due to declines in foreign exchange losses and interest payments due to financial structure reform.
The criticism over the issues of external directors and class action suites is heating up as the presidential election draws near. Under the law permitting class action suites, a representative shareholder may file a lawsuit regarding window dressing accounting on behalf of other shareholders and all will receive compensation should the suite succeed. However, the FKI is opposed to this legislation claiming that it could open the floodgate to claims with a consequent negative impact on business and stock prices, with minority shareholders being the big losers. FKI Executive Director, Kim Suk-Moo said, "The extent to which accounts are window dressed and the validity of class action suites are difficult even for specialists to discern." He also added that, "In the end, everything will be decided according to the subjective assessment of an adjudicator."
The introduction of external directors is being criticized from all sides. While some groups claim the improvements in transparency it has brought have been in inadequate, others such as the Korean Chamber of Commerce & Industry (KCCI) say it will dampen competitiveness and demand it be abolished.
During a symposium last April on the topic of external directors, Professor Lee Hyeong-kyu of the Hanyang University Law School criticized the appointments made so far. "Because 78 percent of external directors are nominated by major shareholders or boards of directors, the system has not been effective," he said. Professor Lee called for controls to be placed on external director candidate recommendations made by investment organizations or minority shareholders. However, the KCCI commented that, "The external director system will only hinder the promptness of management decision-making and it will act as a barrier to the appointment of fully qualified candidates. The appointment of external directors should be made on a case-by-case basis rather than be an obligation."
[Economy 21 100 edition]
- TEMPETE MANAGERIALE A LA COREENNE
Les entreprises coréennes voulaient tuer Confucius. Mais la route est longue du respect absolu envers les chefs au management participatif.
John Koo, PDG du géant coréen de l'électronique LG, veut donner l'image d'un patron moderne. Tandis que ses prédécesseurs étaient distants, enfermés dans leur tour d'ivoire, attitude traditionnelle des patrons coréens, lui joue l'ouverture et le dialogue. En 1999, du jamais-vu dans l'entreprise, il s'est déplacé en personne dans les usines pour discuter avec les représentants du personnel de la restructuration du groupe. L'occasion pour l'ancien élève de Princeton d'annoncer une grande nouvelle : le management par objectif est désormais la règle ! Le message du chef est clair : les petits soldats habitués à obéir tête baissée doivent devenir des leaders, des meneurs capables de faire preuve d'initiative et de créativité pour faire de LG une " digital fun place ". Et pour réussir ce challenge, John Koo donne de sa personne : tous les jours, via une carte postale électronique, il les encourage à construire ce monde nouveau.
Il est trop tôt encore pour juger de la réussite de cette volonté de réforme. Mais John Koo a gagné au moins sur un point : il est devenu en Corée le symbole de la révolution managériale. Car, s'il y a belle lurette que dans les pays occidentaux les entreprises se dopent au management participatif, en Corée, imaginer qu'un ouvrier puisse prendre des initiatives relève encore de l'utopie d'ultragauche. Cela a même un petit côté obscène dans une société où les entreprises sont modelées par le confucianisme et où les valeurs fondamentales restent la discipline, le respect envers les chefs et les anciens.
Mais, en 1997, une crise sans précédent a jeté à bas une partie des chaebols, ces immenses conglomérats familiaux (Samsung, SK, Hyundai, LG) qui structurent l'économie locale. Elle les a obligés, sous la pression syndicale et les grèves, à tout chambouler pour retrouver le chemin de la compétitivité et la confiance d'une population meurtrie par les vagues de licenciements. En quelques mois, le virage qui s'est opéré a été sans précédent. Brutalement, on a vu les directions se remplir de managers formés dans les meilleures universités américaines (Stanford, Harvard, MIT, Columbia). Mieux, on y a vu des directeurs étrangers. Ainsi, en 1997, chez Samsung Electronics, le comité de direction ne comptait aucun non-Coréen. En 2000, ils sont 50, soit un tiers des postes.
Les grands groupes ont remis à plat leurs méthodes de gestion. Les salariés, sidérés, se sont vu imposer tout à trac des objectifs, clairs et précis, définis à chaque niveau de l'entreprise, de nouvelles responsabilités et une rémunération au mérite. Autant de mesures qui sont apparues au pays du Matin calme comme une véritable révolution culturelle.
Trois ans plus tard, le succès est-il au rendez-vous ? Ce serait trop simple. " Dans les chaebols de petite taille, les fils des fondateurs sont diplômés de business schools mais leurs pères ne leur ont jamais donné de véritables responsabilités, confie un observateur français. Ce sont des princes sans pouvoir. " N'en déplaise à John Koo, on ne change pas une culture d'entreprise en deux ans, ni même en cinq. Certes, les Coréens sont gens de bonne volonté. Dans ce pays, l'entreprise est reine et les employés placent sa réussite en tête de leur priorité existentielle ! Mais le mental évolue lentement.
Prenez les patrons. Les as du management occidental leur recommandent de motiver leurs salariés, de les responsabiliser... Mais comment abandonner sans souffrir son statut de droit divin ? Ici, en effet, la hiérarchie est sacrée. Le nombre de niveaux, du " taeri " (assistant manager) au " sajangnim " (managing director), rappelle une armée mexicaine. Le titre est particulièrement valorisé. S'adresser à un collègue, c'est l'appeler par son nom et son titre dans sa société.
Dans le même temps, le clivage entre chef et subalterne est profond. Un chef est nécessairement " supérieur ". Même si cela doit bloquer la signature d'un contrat, il ne peut faire lui-même les photocopies ou le café. Les réunions se réduisent souvent aux longs monologues du responsable hiérarchique, qu'écoutent religieusement ses subordonnés. Seul mouvement que s'autorisent ces derniers : le hochement de tête pour approuver le maître ! Dans la tradition confucéenne, en effet, une idée est rarement remise en question lorsqu'elle vient d'en haut. De toute façon, comme le rappelle Philippe Tirault, directeur général de Heidrick and Struggles, un cabinet de chasseur de têtes, " les Coréens estiment que le patron est payé pour prendre des décisions ".
Difficile, dans ces conditions, d'inciter les salariés à devenir des leaders... D'autant que, facteur aggravant, il est très mal vu en Corée de se distinguer des autres. Ici, on a l'esprit de groupe. Comme au Japon, il est normal pour un employé de se retrouver le soir avec ses collègues de bureau pour le traditionnel " soju " (alcool local) ou au karaoké. On fait carrière par son dévouement à l'entreprise et on est augmenté en fonction de son ancienneté. Dans une telle culture, imposer un système de rémunération variable, avec prime à la performance individuelle relève du challenge !
Mais certains salariés ont intérêt à faire bouger le système : ceux qui veulent être mieux reconnus et surtout mieux payés. " C'est en particulier le cas dans le secteur de la vente, qui offre aux jeunes et aux femmes un ascenseur social plus rapide ", constate François Bonnay, directeur Asie de Clestra, une entreprise française de fabrication de cloisons et de plafonds métalliques, installée à Gumi (209 millions d'euros de chiffre d'affaires). Avec eux, l'avenir est en marche, si l'on en croit les observateurs. Les archaïsmes devraient disparaître avec la prochaine génération... Soit dans une dizaine d'années. John Koo devra se montrer patient
Nathalie Lamoureux - Source : Le Point 14/06/02
- GUIDE DU SAVOIR VIVRE EN COREE
Art de vivre Il est très impoli de se resservir à boire tout seul, de flirter et de se moucher en public, de quitter le théâtre avant la fin du spectacle. La tenue vestimentaire est très importante. Elle détermine la fonction sociale. Un cadre doit être en costume, et cela même pour la visite d'une usine.
Chauvinisme régional : Ne pas négliger la haine ancestrale entre la province de Cholla-do (sud-ouest), fief de la Corée militariste d'antan, et celle plus industrialisée du Kyongsang-do (sud-est). Bertrand Pointeau, directeur du bureau Asie de Bain.com, un cabinet de conseil américain, a dû revoir récemment l'organigramme d'un centre d'appels. " Les clients refusaient de parler aux employés originaires de la province ennemie, reconnaissables à leur accent. "
Compétences : Les Coréens ne croient pas à la spécialisation initiale. " Alors qu'il ne connaît rien ni au Réseau ni au business, un étudiant en histoire issu de la prestigieuse Seoul taehakkyo peut très bien être recruté pour vendre des solutions réseau high-tech ", raconte Laurent Guérin, ex-expatrié et fin connaisseur du pays.
Femmes : Le seul avantage qui leur est accordé est un jour de congé mensuel de plus que les hommes, le Menstruation Day ! Les patrons, qui négocient actuellement la réduction du temps de travail à 40 heures, veulent le supprimer, surtout pour les femmes enceintes. Argument : lorsqu'une femme est enceinte, elle n'a pas de règles !
"Perte de face" : Les Coréens ne cachent pas leurs émotions. Ils hurlent et se battent parfois dans l'entreprise. Mais attention : les critiques verbales proférées en public envers un salarié peuvent lui faire perdre la face. Humilié, l'employé sera démotivé et finira par partir.
Revenus : Le salaire moyen mensuel est de 1.620 euros, le revenu moyen par mois d'un célibataire, de 2.744 euros.
Sens des affaires : Les Coréens sont de redoutables négociateurs. S'énerver ou vouloir parler à tout prix est un manque de tact. Dès votre arrivée, ils vous demanderont la date et l'heure de votre départ pour mettre la pression au dernier moment. Une réunion de business finira très souvent au noraebang (karaoké), avec ou sans " hôtesse ". Gare aux chantages de toute sorte Source : Le Point 14/06/02
- IFC TO INVEST $87 MIL. IN KOREA'S HOUSING FINANCE SECTOR
The International Finance Corporation (IFC), the private sector lending arm of the World Bank Group, will invest in a unique project worth $87 million in Korea's housing sector, an IFC official said yesterday.
IFC's financing consists of an equity investment of up to 13 billion won ($10 million) in NewState Capital Corporation Limited (NewState). IFC will also provide a guarantee for up to 100 billion won ($77 million) under a revolving warehousing vehicle-the first of its kind in the country. The warehousing vehicle will purchase pools of mortgages and once a sufficient quantity of mortgages has been accumulated, the warehousing vehicle will issue mortgage-backed securities (MBS) to institutional investors.
This project will help to develop the secondary mortgage market in Korea by introducing standardized primary mortgage contracts and international best practices to facilitate the issuance of MBS. In the U.S, MBS is the 4th largest, in terms of volume, fixed income securities, while in Korea dominant products are treasury bond, corporate bond and agency bond. MBS can be relatively secure and profitable to domestic investors, particularly to pension fund, as well as other public funds.
The recapitalized NewState is expected to become a new type of non-bank financial institution stimulating great market competition, diversification, and innovation in a sector that has traditionally been underdeveloped and quasi-monopolistic. Currently, 99% of mortgage is originated by large commercial banks in Korea. Activities of non-bank financial institutions are weak because funding sources, such as warehousing line and securitizations, are not easily accessible.
NewState is Korea's only non-bank financial institution specializing in home mortgage origination that is also independent from a bank or large conglomerate. The company currently originates, manages and services residential mortgage assets, including eight pools of mortgages of approximately 15 billion won ($91 million) that it has securitized since April 2000. NewState operates a network of nine sales offices throughout the country.
Source : Korea Times - 09/06/02
- COREE DU SUD, LE PAYS LE PLUS "BRANCHÉ" DU MONDE
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Source : Le Figaro - 17/06/2002
- TELECOMS - THE FUTURE IS IN SOUTH KOREA
The world isn't just watching South Korea for World Cup soccer. Tech-savvy Koreans are trying out one of the latest high-speed wireless Internet systems. Their response to the new technology will shape the outcome of third-generation services globally
TO GLIMPSE THE future of wireless Internet, go no further than the ritzy Seoul suburb of Samsong. Next to a massive media centre for foreign journalists covering the soccer World Cup tournament, Korea Telecom has erected a pavilion to showcase a trial version of its sleek new 3G, or third-generation, mobile phone. Click here, says one of the sultry young women in mini-skirts demonstrating the phone, and you can download video on demand. The built-in camera allows videotelephony and snapshots that can be e-mailed to a personal computer. "This is the most powerful wireless Internet solution," says Ryu Jin Kon, a Korea Telecom technician.
But there's an even better guide to the world of next-generation wireless Internet, one that might erase persistent doubts about the technology's long-term market potential. South Korea, where a passion for the Internet has bred some of the world's most advanced cyber technology, is the test bed for a new standard being hyped as the most powerful 3G service anywhere--despite the fact that it uses frequency spectrum designed for the current generation of mobile phones. "Koreans are a very tech-savvy crowd, and they're not afraid of new technology," says Terry Yen, Asia-Pacific director for Qualcomm's CDMA, or code-division multiple access, development group. "If 3G doesn't go well there, it doesn't bode well for the rest of the world."
This new technology has a typically ugly name--Evolution Data-Optimized system, or EV-DO. It's an enhancement of the current so-called 2.5G service, and can transmit and receive data at the hitherto unheard-of speeds of up to of 2.4 megabytes per second. That's around seven times faster than the world's first 3G service launched last October by Japan's NTT DoCoMo. Korea Telecom, the country's biggest telecoms company, and SK Telecom, its biggest mobile carrier, both launched the service this year and are expanding coverage nationwide. "What's happening in Korea is very exciting," says Sanjeev Verma, co-founder of Airvana Inc., a Boston-based infrastructure manufacturer for wireless Internet companies. "As usual it's taking the lead in advancing wireless technology."
EV-DO's biggest attraction is that it can handle virtually every application, except global roaming, that full-blown 3G would be capable of under the official wideband-CDMA standard. When fully developed, W-CDMA will be capable of transmitting at 10 megabytes per second. But it will take years to reach that speed. Right now EV-DO is faster, and because it is based on an older technology it requires only a small fraction of W-CDMA's capital expenditure. With NTT DoCoMo's 3G service failing to attract consumers in significant numbers, the world will be watching closely how Korea's population of Internet fanatics takes to the applications offered via EV-DO.
"All eyes are on Korea," says Bill Sohn, UBS Warburg's Hong-Kong based head of telecoms research for North Asia. "If consumers embrace these service areas it will open the door for other operators to proceed."
With mobile telecoms companies still awaiting decent returns on their investments in the current 2.5G standard, EV-DO will give them another reason to delay the expensive W-CDMA roll-out perhaps beyond 2005. This doesn't mean W-CDMA won't happen. In fact, EV-DO could act as a bridge to the next generation, whetting consumer appetites for speedier data transmission and allowing carriers to collect the huge revenues needed to fund full-blown 3G. SK Telecom announced in April it would delay its full-blown 3G launch by a year to 2004.
Julius Kim, telecoms analyst for ABN Amro in Seoul, says he was told by European telecoms carriers during a recent trip that they preferred to wait for 4G, in the form of data speeds approaching 10 megabytes per second, in the absence of solid markets for W-CDMA's signature applications like videoconferencing. "About 75% of them said they don't need 3G. They were very curious about EV-DO, but some said they don't want to go to 3G at all. They thought they should skip to 4G."
That attitude isn't so surprising, given the pinched finances at many European and United States telecoms companies. But a combination of political and competitive pressures will ensure 3G gets its day in the sun. European carriers have paid out billions of dollars for 3G licences. In Korea, where SK Telecom, Korea Telecom and LG Group paid out $1 billion each for licences, there is even more pressure to be among the first to usher in the 3G era.
The government is pushing telecoms companies hard to move to the next level of wireless Internet, in part to burnish Korea's reputation as a hi-tech economy. It wants roll-out next year, and Korea Telecom's third-generation unit, KT-ICOM, is determined to comply.
That's in defiance, say some industry experts, of rickety projections of potential returns on the billions it would cost to roll out the network. "If you push for W-CDMA in the near future it could be received by the market as a negative," says Chang Sung Min, a telecoms analyst for Samsung Securities in Seoul. It's in defiance, too, of Korea Telecom's mobile operator, KT Freetel, which wants to maximize revenues from the current generation of mobile services and EV-DO before moving on to an expensive new era. "It's a power game," said a KT-ICOM executive. "But KT Freetel has more power because it makes more money."
Those factors mean any 3G roll-out will probably be very limited in coverage, clearing the way for EV-DO to make a splash before the market starts demanding the kinds of services that only W-CDMA can deliver. "If global roaming becomes popular, W-CDMA is much better," says SK Telecom's spokesman Kwon Chul Keun. "That's why we got the W-CDMA licence."
So what will be learned from EV-DO, the first-ever high-speed wireless Internet to be introduced into a sophisticated market? The Korean experience will be crucial to refining the marketing strategies and applications needed to make full-blown third-generation services profitable, say industry insiders. Consumer reactions to services featuring video-streaming and videotelephony in particular, which EV-DO will introduce for the first time, will be closely watched. SK Telecom, for example, plans a service allowing users to view goods using streaming video and buy them through a handset equipped with a chip linked to a credit-card account.
* NEW AND IMPROVED
Vast improvements will be available for location-based services, which can be patchy on handsets using the slower 2.5G technology. These handsets contain global positioning system receivers that allow users to communicate their whereabouts and send digital maps showing the fastest route to a destination. "This experience is very important," says SK Telecom's Kwon. "We can predict what kinds of contents will be possible during the 3G era."
Qualcomm, which developed EV-DO technology, points to the experience to be gained from marketing these services to an Internet-savvy market. Pricing, too, will be new territory as consumers will be charged for the amount of information they send or receive, rather than time spent on-line. "Koreans are the first to get into the game and figure out what it is they want," says Qualcomm's Terry Yen.
But caution is the watchword in any hi-tech industry. Even if this early take on 3G proves a hit in Korea, it may be that other countries try to emulate its success at their peril.
"I can't say that just because it does well in Korea it will do well everywhere else," says Bill Sohn of UBS Warburg. "Korean consumers are unique. They have high spending power." That's sound advice. In the end it will be spending power, not sending power, that determines the success of the latest 3G dream.
* SURVIVAL OF THE FITTEST
EV-DO is crucial for its developer, Qualcomm, which aims to make a chipset that will win widespread acceptance when W-CDMA 3G begins. W-CDMA is based on the rival European Global System for Mobile Communications (GSM) standard. But if Qualcomm can show EV-DO has faster data transmission and can be integrated into GSM, it will grab market share. "This is a survival tool for Qualcomm," says Julius Kim of ABN Amro Asia. "If it doesn't come up with a working model in Europe, it won't have any customers."
* KNOW YOUR GENERATION
1G, or first generation, refers to technology from the late 1970s to early 1980s. The networks used analog voice signalling. They were the first true mobile-phone systems, initially known as "cellular mobile radio telephones."
2G, or second-generation, began in the 1990s. Much of this technology is still in use. The 2G cellphones feature digital voice encoding.
3G, or third-generation wireless, refers to developments in personal and business wireless technology. 3G is expected to have enhanced multimedia and be usable in all popular modes, such as cellular telephone, e-mail, paging, fax, videoconferencing, and Web browsing.
CDMA stands for code-division multiple access. It refers to any of several protocols used in 2G and 3G wireless communications. As the term implies, CDMA allows numerous signals to occupy a single transmission channel, optimizing the use of available bandwidth.
W-CDMA, or wideband CDMA, is a 3G mobile wireless technology offering much higher data speeds to mobile and portable wireless devices than commonly offered in today's market.
By John Larkin/SEOUL - Source : Far Eastern Economic Review - 20/06/2002
- NOKIA VENTURES EXPANDS INTO KOREA
Nokia Venture Partners, the venture capital arm of the world's largest handset manufacturer, has announced its first investment and establishment of an office in South Korea.
Nokia will investment $5m in WiderThan.com, a provider of mobile internet content, applications and solutions. The company has developed products such as a wireless avatar chat application and operates a service within SK Telecom's NATE mobile internet portal enabling users to stay connected to their Yahoo e-mail on the move. Nokia's entrance into the South Korean early stage investment market emphasises the growing interest in a country which has adopted wireless multimedia services ahead of Western Europe and even Japan. South Korea has had commercial 3G networks for over eighteen months, built on Qualcomm's CDMA2000 1x technology, and the major operators already provide video and rich application download services. Nokia Ventures, which has backed companies such as PayPal and fusionOne, has recently closed a $500m fund and adds the office in Teheran Valley, Seoul to existing locations in Washington DC, London, Helsinki, Seoul, Hong Kong and Japan.
"We recognise that the Korean market is playing an important role in shaping the future of mobility and is a very promising and growing market for mobile start-ups," said John Malloy, Partner, Nokia Venture Partners. "Our first investment in Asia, Korea's WiderThan.com, is a great example of the innovative companies that are looking for venture funding in the market. With the addition of our Seoul office, Nokia Venture Partners expands the value of its global reach and allows us to leverage our global footprint to promote the growth of mobile start-ups worldwide." Jinwoo So, CEO of WiderThan.com, added: "Nokia Venture Partners had reviewed various aspects of WiderThan.com, including core technology, global marketing capability, and precedents in advancing to other countries before making its decision to invest. Combining Nokia Venture Partners' global reach with the advanced state of the Korean wireless market, Nokia Venture Partners will play a major role in bringing new technologies and business models to the global mobile market." - Source : Live Mobil News 10/06/02
- TWO KOREAS TO COOPERATE IN TELECOM SECTOR
South and North Korea have agreed to cooperate in the telecommunication sector, beginning with a CDMA mobile phone venture, the Ministry of Information and Communication (MIC) said yesterday.
The historic agreement was reached during a five-day visit to Pyongyang by a South Korean delegation, led by Byun Jae-il, the MIC's planning and management assistant minister, which met with senior officials from the North Korean Ministry of Post and Telecommunications.
This was the two countries' first telecom conference.
"At this meeting, the North recognized the superiority of CDMA (code division multiple access) mobile technology. If they decide to introduce the technology in North Korea, we will offer the third-generation CDMA 2000-1x equipment," Byun said in a news conference yesterday.
The meeting was arranged through prior contact between companies of the two sides, including North Korea's Jangsaeng Trading Corp, the ministry said.
During the conference, the South Korean delegates suggested organizing a joint consortium comprising both sides' telecom companies to expand CDMA and international telephone lines around Pyongyang and modernize North Korea's network and system business.
The consortium, if launched, will include South Korean companies like SK Telecom, KT, Samsung Electronics, LG Electronics and Hyundai Syscomm.
The South Korean delegation, which comprised business figures from the above companies as well as two government officials, also asked the North to submit related documents on their telecommunications laws and business to enable the joint project to proceed smoothly, the ministry said.
But it appears the North has conducted very limited research in the field, it added.
Accordingly, details about business size and the start time for services will not be decided until basic information is exchanged and the two governments meet several more times to plan out the venture, the ministry said.
The two sides will hold another meeting in Beijing or Pyongyang within a month to come up with ways to enhance cooperation in the telecom project.
Meanwhile, showing great enthusiasm for the project, the North's side is said to have begun conducting a feasibility study immediately after hearing the South's proposals.
"It being the first meeting, the significance lies strongest in the fact that the North is interested in participating in the joint project and that it seems very much impressed with Korea's CDMA technology," a ministry official said.
It is also meaningful that there is a possibility North Korea will become the "connector" between Korea, China and Japan in the "Asia CDMA Belt" project, led by Korean telecom leaders like SK Telecomm, he added.
According to the South Korean delegation North Korea is still very undeveloped in the communication sector.
"The demand comes chiefly from tens of thousands of foreigners living there. The Korean companies looking to participate in the project are doing so with long-term goals in mind," the official said.
Source : Korea Herald (2002.06.11)
- GE, SIEMENS, PHILIPS BID FOR S.KOREA'S MEDISON
SEOUL, June 18 (Reuters) - General Electric (GE), Siemens (SIEGn) and Philips Electronics (PHG) are competing to take over South Korea's largest medical device supplier, Medison Co, main creditor Hana bank said on Tuesday. Medison has been under a court protection since March 8 after the ultrasonic diagnostic tool developer failed to honour its debts in late January.
"Initially there were 13 would-be investors which had expected to bid for Medison but only five including the three big names submitted letters of intent," said Hana Bank official Lee Nam-yong. The bank is currently in charge of the insolvent firm.
"I have been informed Siemens is the most aggressive one with a significant level of discussion progressing even before the submission," Lee said.
Medison spokeswoman Shin Hye-sun said a top negotiating partner would be named around July 26 but the date could be brought forward depending on the progress.
Creditors had appointed Youngwha Accounting and Hannuri Accounting to handle the sale, Lee said.
Medison posted a net loss of 101.4 billion won ($82.44 million) last year on sales of 207.1 billion won, while its current debt stands at around 250 billion won, Shin said.
The once-thriving Medison's financial position was shaken by a tumble in the over-the-counter Kosdaq (KQ11) in 2000 that led to a huge valuation loss at the company, which held many stakes in Kosdaq-listed companies.
As part of its restructuring plan, Medison sold a 65.4 percent stake in its Austrian unit Kretztechnik AG to General Electric for 100 million euros in July 2001, Shin said.
Source : Reuters - 17/06/2002
- IMPORTED CARS FACE NEW NOTIFICATION SYSTEM
The Korea Customs Service said yesterday that it decided to scrutinize the declared prices of imported used foreign passenger cars before they clear customs.
The KCS will not recognize the declared prices but will calculate the car prices on the basis of corresponding blue book values for used cars applied by the United States.
The measure is designed to prevent customs duty evasion by undervaluing used foreign cars. Customs officials said that Korean students overseas are increasingly returning with used cars ostensibly as part of their personal belongings. When customs inspection of these cars was tightened, they were reported as part of normal imports with stated values less than the actual purchase prices.
Meanwhile, the imports of used cars reached 1,241 valued at $13.8 million so far this year as of the end of May; the import volume is up 160 percent from the same period last year and the import value is up 229 percent. Last year, the imports of used cars reached 1,861 worth $14.4 million.
Source : Korea Times - 8/06/02
- ALFA ROMEO SET TO ENTER KOREAN MARKET
Alfa Romeo, an Italian luxurious sports car brand, is set to enter the Korean market as soon as early next year.
GM Korea reported on June 13 that it has decided to introduce Alfa Romeo, a brand of Fiat partly controlled by he U.S. carmaker, into the domestic market in an attempt to penetrate into a growing car import market.
A series of the Alfa range, including the Alfa 156, 166 and Spider, will be put up for sale in Korean markets early next year.
[Daily Economy (2002.06.13)]
- BIO-DIESEL STATION DEBUTS IN INCHEON
Korea's first bio-diesel gas station made its debut at the Seoul metropolitan landfill in northern Incheon, the Ministry of Environment said yesterday.
Bio-diesel, which is made from organic materials, including rice bran and soybean oil, is effective in cutting air pollution and greenhouse gases, officials said. The fuel, used in a 20-80 percent mixture with normal diesel, has been used widely in the United States and France since the 1990s, officials said.
The gas station will pump the innovative fuel into the 1,600 waste transport trucks visiting the landfill daily, the officials said. The fuel is priced at or below the price of regular diesel, they said.
According to a study by the National Institute of Environmental Research, bio-diesel, produced by a domestic company, produced 17 percent less carbon monoxide, 15 percent less hydrocarbon, 18 percent less fine dust, and 14 percent less smoke than normal diesel.
"We will gradually expand the service based on results of the pilot program at the landfill site," the official said.
(firstname.lastname@example.org) - Source : Korea Herald - 2002.06.06
- PLANT CONSTRUCTION EMERGES AS LEADING EXPORT ITEM - By Kim Sung-jin
Overseas plant construction has emerged as one of core export items in Korea.
According to the Ministry of Commerce, Industry and Energy yesterday, plant exports during the first five months of this year totaled $4.19 billion, up 28.9 percent over $3.26 billion in the corresponding period of last year.
The increase is a great leap in contrast to the nation's total exports that shrank 3.5 percent during the January-May period a year ago.
Beside telecom equipment exports that grew 38 percent year-on-year during the period, overseas facility construction is exceptional compared with the other major export items such as petroleum, semiconductor, autos, computers and home appliances that showed a spectrum of growth and decline between -37.3 percent to 14.1 percent.
Overseas plant construction orders received, stood at $2.8 billion in 1998, gradually increased to $4 billion in 1999 and had more than doubled to $8.4 billion in 2000, going on to exceed the $10 billion mark last year. Korean firms hope to secure $12 billion worth of overseas plant construction orders this year.
There are only five export sectors that exceeded the $10 billion mark last year. Textile exports posted $15.8 billion that of semiconductors $14.3 billion, autos $13.3 billion, computers $11.2 billion and wireless telecom equipments $10 billion.
email@example.com - Source : Korea Times - 4/06/02
- PARADISE GROUP TO BUILD LEISURE TOWN NEAR INCHEON AIRPORT
Paradise Group, an operator of hotels and casinos in Korea and overseas, will build an integrated leisure town on Yeongjong and Mueui islands near Incheon International Airport.
Paradise officials said yesterday that the construction of a complex composed of a hotel with 500 guest rooms, an 18-hole golf range and a foreigners-only casino will take about five to 10 years to complete.
The company will invest about 600 billion won ($487 million) into the project, officials said.
To finance the project, Paradise plans to raise 100 billion won of funds through an initial public offering of its shares on the Kosdaq, which is slated for next month, and another 100 billion from the company's reserved earnings. The rest will be raised from outside investors.
The construction site in Mueui Island is highly attractive due to its proximity to Incheon Airport and various natural sightings of forest, white beach and mountains.
The project follows Incheon City's announcement of a development plan for the three vicinities of Incheon Airport that include Yeongjong Island, Gimpo reclaimed land site and Songdo new town of Incheon.
The city, under the discussion with related organizations, recently prepared a blueprint that contained such measures as appointing a sector of Yeongjong Island as a free trade zone and creating an international leisure complex on Mueui Island. This plan is part of the central government's larger plan to create a special economic zone around Incheon airport to make Korea the business hub of Northeast Asia.
Paradise Group, represented by Chairman Chun Rak-won, passed a preliminary evaluation for Kosdaq registration on Wednesday.
"As the new project will draw a great deal of public interest, we will fill 40 percent of our board seats with outside directors and publish the process of fund-raising and construction periodically," a company official said.
Source : Korea Herald (2002.06.17)
- STEEL INDUSTRY TO BOOST R&D INVESTMENT
The steel industry will boost its investment in research and development (R&D) to 2 percent of sales revenues by 2010 in an effort to develop high value-added steel products, according to a strategy report prepared by the Korea Steel Association (KOSA).
The KOSA unveiled its vision for the domestic steel industry and a strategy to realize it at a meeting attended by Commerce Minister Shin Kook-hwan, the heads of five economic organizations and leading domestic steelmakers.
KOSA Vice Chairman Park Kon-chi said domestic steelmakers will increase R&D spending to develop revolutionary steel manufacturing procedures.
According to Park, the steel industry's total output last year amounted to 43.85 million tons, accounting for 5.2 percent of global steel production.
Steel output will be increased to 46.98 million tons in 2010, or 4.8 percent of global steel production, under the new blueprint for development of the steel industry.
Park said by 2003, next generation steel production technology will be developed by POSCO and Dongbu Steel and put into use by 2005.
Seven steelmakers led by INI Steel will develop a new production process able to turn out high-quality steel plates from low-quality scrap iron by 2007, according to Park.
They will also find ways to reduce the current five steel production procedures to three to cut production costs by one-third by 2007.
The new steel industry development strategy also calls for bringing R&D investments up to 2 percent of sales revenue by 2010 from the current 1.6 percent, Park said.
The steel industry will cut electric-furnace steel mill production by 3 million tons by 2005, including 700,000 tons within this year, in line with the Organization for Economic Cooperation and Development (OECD) policy to reduce excess global steel production capacity, the KOSA official noted.
The domestic steel industry will try to expand cooperation with steelmakers in Japan and China and create a joint body to promote mutual interests.
The industry will expand its investment in China with POSCO slated to invest $150 million in its Chinese ventures next year, Park said.
Meanwhile, commerce ministry officials said troubled Hanbo Steel would be sold next month with an official contract concluded in the middle of August.
(firstname.lastname@example.org) By Kim Mi-hui Staff reporter - Source : Korea Herald - 2002.06.15
- DAEWOO HEAVY INDUSTRIES SIGNS DEAL WITH JOHN DEERE
Daewoo Heavy Industries and Machinery Ltd. signed an agreement with John Deere's Worldwide Construction and Forestry Division to develop the world's largest four wheel-drive loader, company officials said yesterday.
Daewoo will produce and supply wheel loaders carrying engines produced by John Deere, while John Deere will sell the finished products on the North American market through its dealer network, the officials explained.
Daewoo will begin its export of wheel loaders from next year with an anticipated sale of $3 million annually.
John Deere is a U.S.-based international firm manufacturing farming and construction and forestry equipment, producing and selling over 125 models to about 700 independent dealer locations.
[Korea Herald (2002.05.30)]
- CREDIT AGRICOLE INDOSUEZ MISE SUR LA GESTION D'ACTIFS AU JAPON ET EN COREE
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Source : La Tribune - 12/06/2002