[EDITORIALS]Economic slide must endIs the Korean economy going to collapse and become a tributary economy of China? The Chinese economy has made astonishing progress while the Korean economy has experienced a series of setbacks.
China’s economic growth averaged 9.8 percent annually for the last 10 years, and China rose to become the fourth-largest trading nation, behind the United States, Germany and Japan, last year.
With high-tech companies rushing into China, it has become the “world’s factory.” Due to growing consumption, China has become the sixth-biggest economy in the world. Using its low-cost labor and high technologies, it has captured low-end markets in the world and now threatens Korea in the semiconductor and automobiles industries.
In comparison, Korea needed to be bailed out by the International Monetary Fund despite its “model economy,” and it continues to suffer from populism and political, social and labor unrest.
The gross domestic product grew an estimated 2.9 percent last year and is expected to be under 5 percent this year. Korea now has a high unemployment rate, mounting credit delinquency, an economic slump and an exodus of businesses.
So Korea’s economic status has fallen behind China’s. Moody’s Investors Service graded China’s sovereign debt at A2, one notch above Korea’s. Standard & Poor’s raised China’s sovereign credit rating to BBB+, only one notch below Korea’s.
China has advanced with strong government leadership and solid support from businesses, workers and public servants while Korea has backtracked. Now the two countries’ positions are reversed. Not only could Korea drop even further behind China, but it also could lag behind India, Russia and Brazil.
How can the Korean economy revive? The government should first recognize the seriousness of the situation. It must do away with blind optimism and show leadership.
The president should present a vision for the country’s development and call for the public’s cooperation. He should display his determination with action. The people of this country should work hard to revive the economy and be ready for a new beginning. Time is of the essence, and we need to act now.