Competition between China and Korea heats up
We all know that China forces countries and companies demand a lot of actions from countries. If a country is supplying basic commodities, such as steel, their growth is somewhat assured for the time being. A recent Fortune Magazine article (September 27, 2004) outlined its positive effect on Brazil.
However, if a country is just sitting atop of China in the value chain, the country might just bulldoze it away. The motorcycle industry in Indonesia is a good example of this.
Korea, the broadband wonderchild of this decade is feeling the heat and this is what the article wonderfully outlines. It shows that while Korean companies cashed in on the growth by expanding into the mainland, this is also a double-edged sword.
Economists are quoted in the article saying that "High-tech electronic parts, semiconductors and wireless communication equipment comprise nearly 40 percent of Korea's export basket, and an international Chinese onslaught in those fields could leave Korean companies battered. The fears have only gotten worse with the latest projections by influential private think tank Samsung Economic Research Institute, which has forecast that although overall exports this year will gain 30 percent from the level of 2003, there will be a slowdown in growth for exports of high-tech products - because of a low-price offensive by China."
Competition heats up in all sectors that Korea dominated and where the country demonstrated export savvy - steel, shipbuilding, electronics and semiconductors.
There is much more in this very interesting article, so if you find the time, read it, as this shapes future events in Asia.
However, if a country is just sitting atop of China in the value chain, the country might just bulldoze it away. The motorcycle industry in Indonesia is a good example of this.
Korea, the broadband wonderchild of this decade is feeling the heat and this is what the article wonderfully outlines. It shows that while Korean companies cashed in on the growth by expanding into the mainland, this is also a double-edged sword.
Economists are quoted in the article saying that "High-tech electronic parts, semiconductors and wireless communication equipment comprise nearly 40 percent of Korea's export basket, and an international Chinese onslaught in those fields could leave Korean companies battered. The fears have only gotten worse with the latest projections by influential private think tank Samsung Economic Research Institute, which has forecast that although overall exports this year will gain 30 percent from the level of 2003, there will be a slowdown in growth for exports of high-tech products - because of a low-price offensive by China."
Competition heats up in all sectors that Korea dominated and where the country demonstrated export savvy - steel, shipbuilding, electronics and semiconductors.
There is much more in this very interesting article, so if you find the time, read it, as this shapes future events in Asia.
posted by Andreas @ 10:35 am
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