World Trade Environment and the Korean Economy Industrial

World Trade Environment and the Korean Economy Industrial Structure of Korean Chong-Sup KIM Seoul National University Chong Sup Kim

World Trade Environment and the Korean Economy Main Industries production and export shares: textile, clothing industries Chong Sup Kim

World Trade Environment and the Korean Economy Main Industries production and export shares: steel, machinery industries Chong Sup Kim

World Trade Environment and the Korean Economy Main Industries production and export shares: electro-domestic, automobile, and ship building industries Chong Sup Kim

World Trade Environment and the Korean Economy Main Industries production and export shares: semiconductors & telecommunication equipment, and computer industries Chong Sup Kim

World Trade Environment and the Korean Economy Main export products in the last 10 years Production share 1) Export share 1990 1995 2000 IT제품 8. 4 12. 3 18. 0 28. 2 34. 1 (통신기기) 1. 6 1. 5 3. 9 1. 5 1. 8 5. 1 (컴퓨터) 1. 1 1. 6 3. 3 3. 1 3. 5 8. 4 (반도체) 3. 6 6. 8 7. 1 6. 9 17. 7 15. 1 비IT제품 93. 4 87. 7 81. 7 76. 9 63. 1 (섬 유) 7. 0 5. 5 4. 0 9. 9 10. 7 7. 9 (의 류) 3. 8 2. 6 1. 5 12. 3 4. 0 2. 9 (석유제품) 4. 1 5. 1 10. 5 1. 0 1. 9 5. 4 (철 강) 9. 5 8. 8 8. 2 8. 3 8. 0 6. 6 (기 계) 6. 0 7. 2 8. 6 5. 4 6. 9 7. 0 (가 전) 5. 1 3. 6 2. 5 8. 2 5. 4 4. 1 (자동차) 9. 2 9. 7 9. 3 3. 5 7. 3 8. 7 (선 박) 1. 8 2. 3 3. 8 4. 3 4. 4 4. 8 기 타2) - - - 5. 1 4. 9 2. 8 100. 0 계 1) In manufacture Chong Sup Kim

World Trade Environment and the Korean Economy Korea’s total export and its share in world market Total export Market share Chong Sup Kim

World Trade Environment and the Korean Economy World market share of Korea’s main export products World market share (%) 1980 1990 2000 rank (2000) Manufacture 1. 4 2. 5 3. 3 10 (textile) 4. 0 5. 8 8. 1 3 (cloth) 7. 3 2. 5 10 (steel) 2. 2 3. 4 4. 7 8 (chemical products) 0. 5 0. 8 2. 4 12 (office and telecom eq. ) 2. 0 4. 8 5. 5 10 - - 7. 7 3 0. 1 0. 7 2. 7 11 0. 9 1. 9 2. 7 12 (semiconductors)1) (automobile) Total export 1) Production base Chong Sup Kim

World Trade Environment and the Korean Economy Strength and Weakness of the Korean Industry Chong Sup Kim

World Trade Environment and the Korean Economy Strength: quality labor Share of workers with more than high-school education among economically active population Korea (2001) USA (2000) Japan (1997) Germany (1999) UK (1999) France (1998) China (1999) 24. 9 (17. 2) 31. 1 (-) 30. 9 (18. 6) 23. 8 (13. 7) 24. 7 (16. 1) 23. 7 (-) 3. 8 (-) Chong Sup Kim

World Trade Environment and the Korean Economy Economically active population by age • 15~24 Sub total (25~34) (35~44) (45~54) 55~64 65 이상 total Korea (2001) 9. 5 74. 1 (24. 2) (29. 4) (20. 5) 11. 1 5. 3 100 Japan (2000) 11. 2 65. 3 (22. 3) (19. 2) (23. 9) 16. 1 7. 4 100 USA (2000) 16. 1 71. 0 (22. 5) (26. 9) (21. 6) 9. 9 3. 0 100 note: based on population over 16 in the case of USA Chong Sup Kim

World Trade Environment and the Korean Economy Strength: IT Infrastructure IT infrastructure of selected countries (2000) note : per 100 (per 500 for ADSL) Chong Sup Kim

World Trade Environment and the Korean Economy Strength: IT Infrastructure Share of IT industry in GDP: Korea, USA, Japan Chong Sup Kim

World Trade Environment and the Korean Economy Strength: Access to large market China’s Economic Indicators (2000) • world China (a) Korea (b) (a/b) Population(100 mill) 60 12. 7 0. 4727 26. 87 GDP ($bill) 30, 000 1080(7 th) 457(13 th) 2. 36 <PPP>1) - 4452(2 nd) 728(13 th) 6. 11 GDP per capita ($) - 855 9, 628 0. 09 Export ($bill) 6364 249(7 th) 172(12 th) 1. 45 Import ($bill) 6669 225(8 th) 160(13 th) 1. 40 Int’l reserves ($bill) - 1952)(2 nf) 1023)(5 th) 1. 90 note: 1) 1999 2) Sep. 2001 3) Dec. 2001 Chong Sup Kim

World Trade Environment and the Korean Economy Expected Growth Rate of Chinese Economy 1979~2000 2001~2005 2006~2010 2011~2015 9. 5 7. 7 7. 5 7. 2 Chong Sup Kim

World Trade Environment and the Korean Economy Share of Korean Products in Chinese Market (2001) China’s import (A) Import from Korea (B) Share (B/A, %) textile 150. 5 27. 9 18. 6 Cloth 12. 1 0. 5 4. 3 Petrochemicals 343. 6 53. 1 15. 5 Nonferrous metal 18. 8 2. 2 11. 8 Steel 130. 3 19. 8 15. 2 Machinery 384. 1 20. 5 5. 3 Electro-domestic 16. 0 1. 2 7. 7 Computer 118. 6 5. 0 4. 2 Semiconductors 207. 4 17. 2 8. 3 Telecom equip. 106. 7 6. 9 6. 4 other elect. 237. 5 5. 0 2. 1 automobile 45. 3 1. 7 3. 8 ship 7. 0 0. 1 1. 6 2, 435. 7 234. 0 9. 6 total Chong Sup Kim

World Trade Environment and the Korean Economy Weakness: lack of core technology R&D expenditure $100 mill Korea (2000) USA Japan (1999) (2000) UK (1999) Germany France (2000) (1999) Chong Sup Kim

World Trade Environment and the Korean Economy Competitiveness of Korean Industries (Industrialized countries = 100) Prod. tech Tech devel. digitaliz ed Standar dization Quality control design Outsourcing Textile 95 70 50 50 90 60 70 Petroq. 95 75 80 90 90 90 60 Steel 95 90 95 95 95 - 90 Machinery 85 75 50 60 80 60 70 Electro-d 95 80 85 70 90 85 90 Automobile 90 80 70 80 85 85 85 Ship build 95 80 80 75 95 90 85 Telecom eq. 90 70 85 75 - 80 80 Computer 95 85 95 70 85 85 95 Semicond. 95 - 95 90 100 - 95 Chong Sup Kim

World Trade Environment and the Korean Economy Technology trade balance $100 mill Chong Sup Kim

World Trade Environment and the Korean Economy Technology trade of selected countries Korea (2000) USA (1999) Japan (2000) UK (1998) Germany (1999) France (1998) Tech Export (a) 2. 0 364. 7 98. 2 157. 3 130. 6 25. 9 Tech Import (b) 30. 6 132. 8 41. 1 87. 2 169. 2 31. 2 (a/b, %) 6. 5 274. 6 238. 9 180. 4 77. 2 83. 0 Chong Sup Kim

World Trade Environment and the Korean Economy Chong Sup Kim

World Trade Environment and the Korean Economy Chong Sup Kim

World Trade Environment and the Korean Economy Weakness: Competitive pressure from other Developing Countries monthly wage of selected countries Korea (2000) Taiwan (2000) Hong Kong (2000) Singapore (2000) Malaysia (2001) Thailand (2000) China (1999) Vietnam (1999) 1, 415 (1. 0) 1, 235 (0. 87) 1, 294 (0. 91) 1, 761 (1. 24) 390 (0. 28) 146 (0. 10) 78 (0. 06) 58 (0. 40) Chong Sup Kim

World Trade Environment and the Korean Economy Export share of Korea, China, and ASEAN in US and Japan USA Japan Chong Sup Kim

World Trade Environment and the Korean Economy Weakness: High dependence of parts and components Import dependence and import induction index Import dependence (%) Import induction Korea (1995) Korea (1998) Japan (1995) Textile 18. 7 16. 7 6. 4 0. 33 0. 31 0. 11 Chemic 19. 5 20. 9 5. 8 0. 34 0. 38 0. 11 Steel 18. 9 18. 7 8. 8 0. 39 0. 41 0. 18 Machinery 13. 6 13. 9 2. 0 0. 28 0. 30 0. 07 Electric 23. 3 33. 5 5. 8 0. 35 0. 46 0. 11 Med. Eq. 11. 4 17. 7 4. 6 0. 23 0. 31 0. 09 Trans eq 12. 6 14. 3 1. 4 0. 28 0. 31 0. 07 Manufacture 18. 0 21. 8 5. 7 0. 30 0. 36 0. 11 Chong Sup Kim

World Trade Environment and the Korean Economy Ratio of Value Added: Korea and Japan Textile chem Korea steel machinery electr med eq transp manuf Japan Chong Sup Kim

World Trade Environment and the Korean Economy Weakness: Low development of service sector • Share of service industry in GDP world Industrial C. Middle income C Low income C Korea 63. 0 71. 0 54. 0 44. 0 52. 4 • Share of service in trade World Industrial C Middle income C Low income C Korea 18. 1 18. 8 14. 9 17. 8 15. 9 Chong Sup Kim

World Trade Environment and the Korean Economy R&D investment and value added per worker in service sector <R&D investment> <value added per worker compared to manufacture Korea USA Japan UK (1999) (1997) (2000) (1999) (2000) Chong Sup Kim