economic of south korea

1. 1
GREEN UNIVERSITY of BANGLADESH
Assignment
On
International Development Studies (MGT – 311)
ASSAIGNMENT TOPIC: History Economy of SOUTH KOREA and Economy of CHINA
PREPARED FOR:
Samirah Mustafa
Lecturer,
International Development Studies
Department of Business Administration (DBA)
Green University of Bangladesh (GUB)
PREPARED BY:
Anqur Chowdhury
ID: 110106027
DBA, BBA,
Green University of Bangladesh

2. 2
Letter of Transmittal
January 09, 2014
Samirah Mustafa
Lecturer,
International Development Studies
Department of Business Administration (DBA)
Green University of Bangladesh (GUB)
Subject: Submission of an assignment.
Dear Madam
I gladly present to you the assignment titled “Comparison between economy of South Korea and
economy of China.” I have made the assignment individually as you give us to do by help of
your suggestion and internet.
I believe the knowledge and experience I gathered during the assignment will be extremely
helpful in our future professional life. I will be grateful to you if you accept the assignment.
Your support in this regard will be highly appreciated.
Thanking you.
___________________
Anqur Chowdhury
ID. 110106027

3. 3
Economy of CHINA
The socialist market economy of China is the world's second largest economy by nominal GDP
and by purchasing power parity after the United States. It is the world's fastest-growing major
economy, with growth rates averaging 10% over the past 30 years.
China is also the largest exporter and second largest importer of goods in the world. China is the
largest manufacturing economy in the world, outpacing its world rival in this category, the
service-driven economy of the United States of America. ASEAN–China Free Trade Area came
into effect on 1 January 2010. China-Switzerland FTA is China's first FTA with a major
European economy. The economy of China is the fastest growing consumer market in the
world.
On a per capita income basis, China ranked 87th by nominal GDP and 92nd by GDP (PPP) in
2012, according to the International Monetary Fund (IMF). The provinces in the coastal regions
of China tend to be more industrialized, while regions in the hinterland are less developed. As
China's economic importance has grown, so has attention to the structure and health of the
economy. Xi Jinping’s Chinese Dream is described as achieving the “Two 100s”: the material
goal of China becoming a “moderately well-off society” by 2021, the 100th anniversary of the
Chinese Communist Party, and the modernization goal of China becoming a fully developed
nation by 2049, the 100th anniversary of the founding of the People’s Republic.
The internationalization of the Chinese economy continues to affect the standardized economic
forecast officially launched in China by the Purchasing Managers Index in 2005. At the start of
2010s, China remained as the sole Asian nation to have an economy above the $10-trillion mark
(along with the United States and the European Union).
Most of China's economic growth is created from Special Economic Zones of the People's
Republic of China that spread successful economic experiences to other areas. The development
progress of China's infrastructure is documented in a 2009 report by KPMG.
Maoist ERA
By 1949, continuous foreign invasions, frequent revolutions and restorations, and civil wars had
left the country with a fragile economy with little infrastructure. As Communist ascendancy
seemed inevitable, almost all hard and foreign currency in China country were transported to
Taiwan in 1948, making the war-time inflation even worse.
Since the formation of the People's Republic in 1949, an enormous effort was made towards
creating economic growth and entire new industries were created. Tight control of budget and
money supply reduced inflation by the end of 1950. Though most of it was done at the expense
of suppressing the private sector of small to big businesses by the Three-anti/five-anti campaigns
between 1951 to 1952. The campaigns were notorious for being anti-capitalist, and imposed
charges that allowed the government to punish capitalists with severe fines.

4. 4
In the beginning of the Communist party's rule, the leaders of the party had agreed that for a
nation such as China, which did not have any heavy industry and minimal secondary production,
capitalism is to be utilized to help the building of the "New China" and finally merged into
communism.
The new government nationalized the country's banking system and brought all currency and
credit under centralized control. It regulated prices by establishing trade associations and boosted
government revenues by collecting agricultural taxes. By the mid-1950s, the communists had
ruined the country's railroad and highway systems, barely brought the agricultural and industrial
production to their prewar levels, by bringing the bulk of China's industry and commerce under
the direct control of the state.
Meanwhile, in fulfillment of their revolutionary promise, China's communist leaders completed
land reform within two years of coming to power, eliminating landlords and redistribute their
land and other possessions to peasant households.
Mao tried in 1958 to push China's economy to new heights. Under his highly touted "Great Leap
Forward", agricultural collectives were reorganized into enormous communes where men and
women were assigned in military fashion to specific tasks. Peasants were told to stop relying on
the family, and instead adopted a system of communal kitchens, mess halls, and nurseries.
Wages were calculated along the communist principle of "From each according to his ability, to
each according to his need", and sideline production was banned as incipient capitalism. All
Chinese citizens were urged to boost the country's steel production by establishing "backyard
steel furnaces" to help overtake the West. The Great Leap Forward quickly revealed itself as a
giant step backwards. Over-ambitious targets were set, falsified production figures were duly
reported, and Chinese officials lived in an unreal world of miraculous production increases. By
1960, agricultural production in the countryside had slowed dangerously and large areas of China
were gripped by a devastating famine.
For the next several years, China experienced a period of relative stability. Agricultural and
industrial production returned to normal levels, and labor productivity began to rise. Then, in
1966, Mao proclaimed a Cultural Revolution to "put China back on track". Under orders to
"Destroy the Four Olds" (old thoughts, culture, customs and habits), universities and schools
closed their doors, and students, who became Mao's "Red Guards", were sent throughout the
country to make revolution, beating and torturing anyone whose rank or political thinking
offended. By 1969 the country had descended into anarchy, and factions of the Red Guards had
begun to fight among themselves.

5. 5
1978–1990
Reforms began with Li Xiannian and Deng Xiaoping, Chinese leaders in the 80s. Unlike Mao,
Deng and Li were pragmatic leaders, known less for their ideological commitment than for their
slogan: "Who cares if a cat is black or white, as long as it catches the mice." Once they
consolidated their power, they began to put their pragmatic policies to work, determined to bring
China back from the devastation that the Cultural Revolution had wrought.
Since 1978, China began to make major reforms to its economy. The Chinese leadership adopted
a pragmatic perspective on many political and socioeconomic problems, and quickly began to
introduce aspects of a capitalist economic system. Political and social stability, economic
productivity, and public and consumer welfare were considered paramount and indivisible. In
these years, the government emphasized raising personal income and consumption and
introducing new management systems to help increase productivity. The government also had
focused on foreign trade as a major vehicle for economic growth.
In the 1980s, China tried to combine central planning with market-oriented reforms to increase
productivity, living standards, and technological quality without exacerbating inflation,
unemployment, and budget deficits. Reforms began in the agricultural, industrial, fiscal,
financial, banking, price setting, and labor systems.
A decision was made in 1978 to permit foreign direct investment in several small "special
economic zones" along the coast. The country lacked the legal infrastructure and knowledge of
international practices to make this prospect attractive for many foreign businesses, however. In
the early 1980s steps were taken to expand the number of areas that could accept foreign
investment with a minimum of red tape, and related efforts were made to develop the legal and
other infrastructures necessary to make this work well. This additional effort resulted in making
14 coastal cities and three coastal regions "open areas" for foreign investment.
All of these places provide favored tax treatment and other advantages for foreign investment.
Laws on contracts, patents, and other matters of concern to foreign businesses were also passed
in an effort to attract international capital to spur China's development. The largely bureaucratic
nature of China's economy, however, posed a number of inherent problems for foreign firms that
wanted to operate in the Chinese environment, and China gradually had to add more incentives
to attract foreign capital.

6. 6
1990–2000
China's nominal GDP trend from 1952 to 2005
In the 1990s, the Chinese economy continued to grow at a rapid pace, at 10.43%, accompanied
by a rapidly increasing inflation, which reached over 20 percent in 1994. The Asian financial
crisis affected China at the margin, mainly through decreased foreign direct investment and a
sharp drop in the growth of its exports. However, China had huge reserves, a currency that was
not freely convertible, and capital inflows that consisted overwhelmingly of long-term
investment. For these reasons it remained largely insulated from the regional crisis and its
commitment not to devalue had been a major stabilizing factor for the region. However, China
faced slowing growth and rising unemployment based on internal problems, including a financial
system burdened by huge amounts of bad loans, and massive layoffs stemming from aggressive
efforts to reform state-owned enterprises (SOEs).
Despite China's impressive economic development during the past two decades, reforming the
state sector and modernizing the banking system remained major hurdles. Over half of China's
state-owned enterprises were inefficient and reporting losses. During the 15th National
Communist Party Congress that met in September 1997, President Jiang Zemin announced plans
to sell, merge, or close the vast majority of SOEs in his call for increased "non-public
ownership" (feigongyou or privatization.) The 9th National People's Congress endorsed the plans
at its March 1998 session. In 2000, China claimed success in its three-year effort to make the
majority of large state owned enterprises (SOEs) profitable.

7. 7
2000–2010
GDP increase, 1990–1998 and 1990–2006, in major countries
Following the Chinese Communist Party's Third Plenum, held in October 2003, Chinese
legislators unveiled several proposed amendments to the state constitution. One of the most
significant was a proposal to provide protection for private property rights. Legislators also
indicated there would be a new emphasis on certain aspects of overall government economic
policy, including efforts to reduce unemployment (now in the 8–10% range in urban areas), to
rebalance income distribution between urban and rural regions, and to maintain economic growth
while protecting the environment and improving social equity. The National People's Congress
approved the amendments when it met in March 2004.
The Fifth Plenum in October 2005 approved the 11th Five-Year Economic Program (2006–2010)
aimed at building a "socialist harmonious society" through more balanced wealth distribution
and improved education, medical care, and social security. On March 2006, the National People's
Congress approved the 11th Five-Year Program. The plan called for a relatively conservative
45% increase in GDP and a 20% reduction in energy intensity (energy consumption per unit of
GDP) by 2010.
China's economy grew at an average rate of 10% per year during the period 1990–2004, the
highest growth rate in the world. China's GDP grew 10.0% in 2003, 10.1%, in 2004, and even
faster 10.4% in 2005 despite attempts by the government to cool the economy. China's total trade
in 2010 surpassed $2.97 trillion, making China the world's second-largest trading nation after the
U.S. Such high growth is necessary if China is to generate the 15 million jobs needed annually—
roughly the size of Ecuador or Cambodia—to employ new entrants into the national job market.

8. On January 15, 2009, as confirmed by the World Bank the NBS published the revised figures for
2007 fiscal year in which growth happened at 13 percent instead of 11.9 percent (provisional
figures). China's gross domestic product stood at US$3.38 trillion while Germany's GDP was
USD $3.32 trillion for 2007. This made China the world's third largest economy by gross
domestic product. Based on these figures, in 2007 China recorded its fastest growth since 1994
when the GDP grew by 13.1 percent.
8
China launched its Economic Stimulus Plan to specifically deal with the Global financial crisis
of 2008–2009. It has primarily focused on increasing affordable housing, easing credit
restrictions for mortgage and SMEs, lower taxes such as those on real estate sales and
commodities, pumping more public investment into infrastructure development, such as the rail
network, roads and ports. By the end of 2009 it appeared that the Chinese economy was showing
signs of recovery. At the 2009 Economic Work Conference in December 'managing inflation
expectations' was added to the list of economic objectives, suggesting a strong economic upturn
and a desire to take steps to manage it.
2010–present
By 2010 it was evident to outside observers such as The New York Times that China was poised
to move from export dependency to development of an internal market. Wages were rapidly
rising in all areas of the country and Chinese leaders were calling for an increased standard of
living.
In 2010, China's GDP was valued at $5.87 trillion, surpassed Japan's $5.47 trillion, and became
the world's second largest economy after the U.S. China could become the world's largest
economy (by nominal GDP) sometime as early as 2020.
China is the largest creditor nation in the world and owns approximately 20.8% of all foreign-owned
US Treasury securities.
The World Bank's chief economist Justin Lin in 2011 stated that China, which became the
world's second largest economy in 2010, may become the world's largest economy in 2030,
overtaking the United States, if current trends continue. Challenges include income inequality
and pollution. The Standard Chartered Bank in a 2011 report suggested that China may become
the world's largest economy in 2020.
A 2007 OECD rapport by Angus Maddison estimated that if using purchasing power parity
conversions, then China will overtake the United States in 2015. China recently emerged as the
sole nation in Asia to register a GDP figure above the $10-trillion mark, alongside the United
States and the European Union. James Wolfensohn, former World Bank president, estimated in
2010 that by 2030 two-thirds of the world's middle class will live in China. The Director of the
China Center for Economic Reform at Peking University Yao Yang in 2011 stated that
"Assuming that the Chinese and U.S. economies grow, respectively, by 8% and 3% in real terms,
that China's inflation rate is 3.6% and America's is 2% (the averages of the last decade), and that
the renminbi appreciates against the dollar by 3% per year (the average of the last six years),

9. 9
China would become the world's largest economy by 2021. By that time, both countries' GDP
will be about $24 trillion."
In 2011, the IMF warned that government controlled banks could be building up imbalances that
could hamper growth and leave the system "severely impacted". In 2011, the IMF predicted that
China's GDP (purchasing power parity adjusted) would overtake that of the United States in
2016. The state favours state-owned enterprises despite lower productivity; this crowds out
competition, in a phenomenon known as Guo jin min tui.
From 2011 onward, however, China has been experiencing a slowing of its growth that throws
all of the above calculations into doubt. Ray Dalio, founder of the world's largest hedge fund,
told the Council of Foreign Relations that he foresaw Chinese GDP falling to 4-5% due to failure
to switch successfully from the export-driven model to more consumption. However a 2012
Morgan Stanley found that official government statistics may be greatly undercounting the actual
level of consumer consumption.
In 2012, Amnesty International reported that forced evictions that resulted from a construction
boom caused by excessive stimulus spending were a serious threat to China's social and political
stability.
Due to the corruption and political uncertainties of the one-party state and the limited economic
freedom in an economy dominated by large state-owned enterprises, many skilled professionals
are either leaving the country or preparing safety nets for themselves abroad. Perceived
corruption continued to grow worse in China as it dropped from 75th to 80th place in
Transparency International's index of state corruption.
A law approved February 2013 will mandate a nationwide minimum wage at 40% average urban
salaries to be phased in fully by 2015.

10. 10
Economy of SOUTH KOREA
South Korea has a market economy that ranks 15th in the world by nominal GDP and 12th by
purchasing power parity (PPP), identifying it as one of the G-20 major economies. It is a
developed country, with a developed market and high-income economy, and is a member of
OECD. South Korea is one of the Asian Tigers, and is the only developed country so far to have
been included in the group of Next Eleven countries. South Korea had one of the world's fastest
growing economies from the early 1960s to the late 1990s, and South Korea is still one of the
fastest growing developed countries in the 2000s, along with Hong Kong, Singapore, and
Taiwan, the other three Asian Tigers. South Koreans refer to this growth as the Miracle on the
Han River.
Having almost no natural resources and always suffering from overpopulation in its small
territory, which deterred continued population growth and the formation of a large internal
consumer market, South Korea adapted an export-oriented economic strategy to fuel its
economy, and in 2012, South Korea was the sixth largest exporter and seventh largest importer
in the world. Bank of Korea and Korea Development Institute periodically release major
economic indicators and economic trends of the economy of South Korea.
In the 1997 Asian Financial Crisis, the South Korean economy suffered a liquidity crisis and
relied on the bailout by the IMF that re-structured and modernized the South Korean economy
with successive DJnomics policy by President Kim Dae Jung, including the resultant of the
national development of the ICT industry. Despite the South Korean economy's high growth
potential and apparent structural stability, South Korea suffers perpetual damage to its credit
rating in the stock market due to the belligerence of North Korea in times of deep military crises,
which has an adverse effect on the financial markets of the South Korean economy. However,
renowned financial organizations, such as the International Monetary Fund, also compliment the
resilience of the South Korean economy against various economic crises, citing low state debt,
and high fiscal reserves that can quickly be mobilized to address any expected financial
emergencies. Other financial organizations like the World Bank describe Korea as one of the
fastest-growing major economies of the next generation along with BRIC and Indonesia. South
Korea was one of the few developed countries that was able to avoid a recession during the
global financial crisis, and its economic growth rate will reach 6.1% in 2010, a sharp recovery
from economic growth rates of 2.3% in 2008 and 0.2% in 2009 when the global financial crisis
hit.
South Korea was a historical recipient of official development assistance (ODA) from OECD.
Throughout the 1980s until the mid-1990s, South Korea's economic prosperity as measured in
GDP by PPP per capita was still only a fraction of industrialized nations. In 1980, the South
Korean GDP per capita was $2,300, about one-third of nearby developed Asian economies such
as Singapore, Hong Kong, and Japan. Since then, South Korea has advanced into a developed
economy to eventually attain a GDP per capita of $30,000 in 2010, almost thirteen times the
figure thirty years ago. The whole country's GDP increased from $88 billion to $1,460 billion in
the same time frame. In 2009, South Korea officially became the first major recipient of ODA to
have ascended to the status of a major donor of ODA. Between 2008 and 2009, South Korea
donated economic aid of $1.7 billion to countries other than North Korea. South Korea's separate

11. annual economic aid to North Korea has historically been more than twice its ODA. On June 23,
2012, South Korea is landmarked to become the 7th member of the 20-50 club (with the
population surpassing 50 million and maintaining per capita income of US$20,000),
chronologically, after Japan, United States of America, France, Italy, Germany and United
Kingdom. Free trade agreement between the United States of America and the Republic of Korea
was concluded on April 1, 2007. European Union–South Korea Free Trade Agreement was
signed on 15 October 2009. South Korean economy is heavily dependent on the energy imports
and the related refinery technologies in association with Ministry of Knowledge Economy of
Republic of Korea and in cooperation with the South Korea - Australia Free Trade Agreement.
The economy of South Korea has the largest indoor Amusement park in the world, the Lotte
World, adding the notable export-oriented music industry guided by the Ministry of Culture,
Sports and Tourism of the Republic of Korea (for more, see Korea K-Pop Hot 100).
11
Rapid growth from 1960s to 1980s
South Korea's real gross domestic product expanded by an average of more than 8 percent per
year, from US$2.7 billion in 1962 to US$230 billion in 1989, breaking the trillion dollar mark in
2007. Nominal GDP per capita grew from $103.88 in 1962 to $5,438.24 in 1989, reaching the
$20,000 milestone in 2007. The manufacturing sector grew from 14.3 percent of the GNP in
1962 to 30.3 percent in 1987. Commodity trade volume rose from US$480 million in 1962 to a
projected US$127.9 billion in 1990. The ratio of domestic savings to GNP grew from 3.3 percent
in 1962 to 35.8 percent in 1989.
The most significant factor in rapid industrialization was the adoption of an outward-looking
strategy in the early 1960s. This strategy was particularly well suited to that time because of
South Korea's poor natural resource endowment, low savings rate, and tiny domestic market. The
strategy promoted economic growth through labor-intensive manufactured exports, in which
South Korea could develop a competitive advantage. Government initiatives played an important
role in this process. The inflow of foreign capital was greatly encouraged to supplement the
shortage of domestic savings. These efforts enabled South Korea to achieve rapid growth in
exports and subsequent increases in income.
By emphasizing the industrial sector, Seoul's export-oriented development strategy left the rural
sector relatively underdeveloped. Except for mining, most industries were located in the urban
areas of the northwest and southeast. Heavy industries generally were located in the south of the
country. Factories in Seoul contributed over 25 percent of all manufacturing value-added in
1978; taken together with factories in surrounding Gyeonggi Province, factories in the Seoul area
produced 46 percent of all manufacturing that year. Factories in Seoul and Gyeonggi Province
employed 48 percent of the nation's 2.1 million factory workers. Increasing income disparity
between the industrial and agricultural sectors became a serious problem by the 1970s and
remained a problem, despite government efforts to raise farm income and improve rural living
standards.
In the early 1980s, in order to control inflation, a conservative monetary policy and tight fiscal
measures were adopted. Growth of the money supply was reduced from the 30 percent level of
the 1970s to 15 percent. Seoul even froze its budget for a short while. Government intervention

12. 12
in the economy was greatly reduced and policies on imports and foreign investment were
liberalized to promote competition. To reduce the imbalance between rural and urban sectors,
Seoul expanded investments in public projects, such as roads and communications facilities,
while further promoting farm mechanization.
The measures implemented early in the decade, coupled with significant improvements in the
world economy, helped the South Korean economy regain its lost momentum in the late 1980s.
South Korea achieved an average of 9.2 percent real growth between 1982 and 1987 and 12.5
percent between 1986 and 1988. The double digit inflation of the 1970s was brought under
control. Wholesale price inflation averaged 2.1 percent per year from 1980 through 1988;
consumer prices increased by an average of 4.7 percent annually. Seoul achieved its first
significant surplus in its balance of payments in 1986 and recorded a US$7.7 billion and a
US$11.4 billion surplus in 1987 and 1988 respectively. This development permitted South Korea
to begin reducing its level of foreign debt. The trade surplus for 1989, however, was only US$4.6
billion, and a small negative balance was projected for 1990.
1990s and the Asian Financial Crisis
For the first half of the 1990s, the South Korean economy continued a stable and strong growth
in both private consumption and GDP. Things changed quickly in 1997 with the Asian Financial
crisis. After several other Asian currencies were attacked by speculators, the Korean Won started
to heavily depreciate in October 1997. The problem was exacerbated by the problem of non-performing
loans at many of Korea's merchant banks. By December 1997, the IMF had approved
a USD $21 billion loan, that would be part of a USD $58.4 billion bailout plan. By January 1998,
the government had shut down a third of Korea's merchant banks. Throughout 1998, Korea's
economy would continue to shrink quarterly at an average rate of -6.65%. Korean chaebol
Daewoo became a casualty of the crisis as it was dismantled by the government in 1999 due to
debt problems. American company General Motors managed to purchase the motors division.
Indian conglomerate Tata Group, purchased the trucks and heavy vehicles division of Daewoo.
Actions by the South Korean government and debt swaps by international lenders contained the
country's financial problems. Much of South Korea's recovery from the Asian Financial Crisis
can be attributed to labor adjustments (i.e. a dynamic and productive labor market with flexible
wage rates) and alternative funding sources. By the first quarter of 1999, GDP growth had risen
to 5.4%, and strong growth thereafter combined with deflationary pressure on the currency lead
to a yearly growth of 10.5%. In December 1999, president Kim Dae-jung declared the currency
crisis over.
2000s
Korea's economy moved away from the centrally planned, government-directed investment
model toward a more market-oriented one. These economic reforms, pushed by President Kim
Dae-jung, helped Korea maintain one of Asia's few expanding economies, with growth rates of
10.8% in 1999 and 9.2% in 2000. Growth fell back to 3.3% in 2001 because of the slowing
global economy, falling exports, and the perception that much-needed corporate and financial
reforms have stalled.

13. 13
After the bounce back from the crisis of the late nineties, the economy continued strong growth
in 2000 with a GDP growth of 9.08%. But the South Korean economy was affected by the
September 11 Attacks, causing growth to fall back to 3.8% in 2001 also because of the slowing
global economy, falling exports, and the perception that corporate and financial reforms had
stalled. Thanks to industrialization GDP per hour worked (labor output) more than tripled from
US$2.80 in 1963 to US$10.00 in 1989. More recently the economy stabilized and maintain a
growth rate between 4-5% from 2003 onwards.
Led by industry and construction, growth in 2002 was 5.8%, despite anemic global growth. The
restructuring of Korean conglomerates (chaebols), bank privatization, and the creation of a more
liberalized economy—with a mechanism for bankrupt firms to exit the market—remain Korea's
most important unfinished reform tasks. Growth slowed again in 2004, but production expanded
5% in 2006, due to popular demand for key export products such as HDTVs and mobile phones.
Like most industrialized economies, Korea suffered significant setbacks during the late-2000s
recession that began in 2007. Growth fell by 3.4% in the fourth quarter of 2008 from the
previous quarter, the first negative quarterly growth in 10 years, with year on year quarterly
growth continuing to be negative into 2009. Most sectors of the economy reported declines, with
manufacturing dropping 25.6% as of January 2009, and consumer goods sales dropping 3.1%.
Exports in autos and semiconductors, two critical pillars of the economy, shrank 55.9% and
46.9% respectively, while exports overall fell by a record 33.8% in January, and 18.3% in
February 2009 year on year. As in the 1997 crisis, Korea's currency also experienced massive
fluctuations, declining by 34% against the dollar. Annual growth in the economy slowed to 2.3%
in 2008, and was expected to drop to as low as -4.5% by Goldman Sachs, but South Korea was
able to limit the downturn to a near standstill at 0.2% in 2009.
Despite the global financial crisis, the South Korean economy, helped by timely stimulus
measures and strong domestic consumption of products that compensated for a drop in exports,
was able to avoid a recession unlike most industrialized economies, posting positive economic
growth for two consecutive years of the crisis. In 2010, South Korea made a strong economic
rebound with a growth rate of 6.1%, signaling a return of the economy to pre-crisis levels. South
Korea's export has recorded $424 billion in the first eleven months of the year 2010, already
higher than its export in the whole year of 2008. The South Korean economy of the 21st century,
as a Next Eleven economy, is expected to grow from 3.9% to 4.2% annually between 2011 and
2030, similar to growth rates of developing countries such as Brazil or Russia.
The South Korean government signed the Korea-Australia Free Trade Agreement (KAFTA) on
December 5, 2013, with the Australian government seeking to benefit its numerous industries—
including automotive, services, and resources and energy—and position itself alongside
competitors, such as the US and ASEAN. South Korea is Australia’s third largest export market
and fourth largest trading partner with a 2012 trade value of A$32 billion. The agreement
contains an Investor State Dispute Settlement (ISDS) clause that permits legal action from South
Korean corporations against the Australian government their trade rights are infringed upon.

14. 14
High-tech industries in the 1990s and 2000s
In 1990, South Korean manufacturers planned a significant shift in future production plans
toward high-technology industries. In June 1989, panels of government officials, scholars, and
business leaders held planning sessions on the production of such goods as new materials,
mechatronics—including industrial robotics—bioengineering, microelectronics, fine chemistry,
and aerospace. This shift in emphasis, however, did not mean an immediate decline in heavy
industries such as automobile and ship production, which had dominated the economy in the
1980s.
South Korea relies largely upon exports to fuel the growth of its economy, with finished products
such as electronics, textiles, ships, automobiles, and steel being some of its most important
exports. Although the import market has liberalized in recent years, the agricultural market has
remained largely protectionist due to serious disparities in the price of domestic agricultural
products such as rice with the international market. As of 2005, the price of rice in South Korea
is about four times that of the average price of rice on the international market, and it was
generally feared that opening the agricultural market would have disastrous effects upon the
South Korean agricultural sector. In late 2004, however, an agreement was reached with the
WTO in which South Korean rice imports will gradually increase from 4% to 8% of
consumption by 2014. In addition, up to 30% of imported rice will be made available directly to
consumers by 2010, where previously imported rice was only used for processed foods.
Following 2014, the South Korean rice market will be fully opened.
Bibliography
http://en.wikipedia.org/wiki/Economy_of_South_Korea
http://en.wikipedia.org/wiki/Economy_of_China