The most popular post in the Seoul Gyopo Guide has been, BY FAR, this:
Korea's Reason for Feasting This Year: The Yen's Strength
There have been over 1,500 readers of this article within the last 24 hours alone. Perhaps this is a comment on the fact that foreigners, still, have no idea about Korea. It is a well-known fact that many Americans (according to the newspaper) believe that Samsung is a Japanese company. At first, I was offended when I read this. However, I realize this was only my personal pride speaking. It doesn't matter: brand quality, sales, and profits matter.
During the comments, questions to this post, which are found at http://www.reddit.com/, a person asked me "What do you (to me) think about the prospects for Korea over the next 5-10 years?"
At first, I laughed and thought to myself, "I cannot decide what to think over the next 5-10 minutes, so how should I answer this question." (농담 치다)
Anyways, here was my response.
The issue, and perhaps only justification for the obvious currency manipulation of the KRW, is that Korea is not in control of many factors that will determine its economic future. It is natural resource poor. Its population is 50mm and not increasing so it will remain to be what I would call a "one-winged bird" that is being propelled by one of the wings, exports. Koreans spend a great deal of their disposable income on food and education, which means that it is difficult for consumer demand to improve dramatically. As such, any large external demand shock will hurt Korea greatly.
The North Korea issue is one of the cost of reunification rather than war, and South Korea has watched Germany struggle for basically a decade with it. To make it worse, Germany was then (and still is) a much larger economy and country than Korea. Korea faces the spectre of a China and Indian set of competitors that match or beat Korean products in the future. That these will all occur in the future is probably inevitable. The question, to me, is the speed at which they occur.
That all said, KoreaInc is in far better shape than its relevent competitors, and the coffers are being built up to defend its hard-fought gains. The government supports the corporations without reservation. At this rate, President Lee's tenure is secure (unlike B.H. Obama's). I don't agree that Japan has fewer problems. It has far deeper problems which make it a ship that almost cannot be turned. Aging population (which has enormous effects on the electronics industry, i.e. does your grandmother complain about/demand new features on consumer electronics items? Koreans do, and loudly.), and Japan's indebtedness will, over the very long term, threaten its leadership in the region. Korea is large enough to be a global competitor in the most dynamic industries, and small enough to not be subjected to a currency war. For now, Korea's proximity to India and China put it in the cat bird's seat. As long as there is no long-lasting external shock, Korea should continue on this path because its market position in the world's most important industries (other than commodities), is good, particularly when adjusted for the size of the population. At this point the ratio of GlobalBrands / population ration is probably the highest in the world. I am not the only one with this opinion: global equity investors are putting their money on this opinion. We will see.
Thanks again for reading and please continue commenting/criticizing these thoughts.
This key point here is that people around the world are continuing to be very curious about Korea, and the quality of information in the general press has been dominated by other Asian countries, which has allowed Korea to continue (almost unnoticed) its economic progress at a pace unimaginable 50 years ago Personally, I was stunned to see the number of visitors to http://www.seoulgyopoguide.blogspot.com/ over the past few days. I took it as a compliment on being Korean, not as the author. Risks remain, and life will continue to be crazy in Korea, but the progress is palpable: the increased interest in all things Korea proves that.
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http://www.seoulgyopoguide.blogspot.com/
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