[Letters] Transforming a crisis into an opportunityInstability in the global economy persists due to concerns about a potential double-dip in the U.S. economy, the current fiscal crisis in Europe, slowed growth in China and rising inflation in emerging economies. The problems in the United States and Europe cannot be resolved within a short period of time, and emerging markets are shrinking. These are the reasons why Korea desperately needs to find a new market. And we have to pay attention to the market in Japan, located right next door.
Due to various tariff barriers, foreign products have difficulty entering the Japanese market. The United States made vigorous efforts to open up the Japanese market in the 1980s but saw no progress. For Korea, Hyundai Motor made an attempt to enter the Japanese market, but the company had to withdraw after 10 years with no success.
Korea’s trade amounts to $1 trillion, and it is hard to understand why excellent Korean products fail in the Japanese market alone. There must be various reasons, but the key is that the Japanese market has unnecessarily strict quality, safety and environmental standards. The country also seeks to maintain an isolated economy like that of the Galapagos Islands, and it takes much more time and money to explore the Japanese market compared to other markets. Perhaps Japan is no longer an attractive market because of its two-decade-long recession.
But Japan, with its $42,000 national per capita income and population of 130 million, is still an enormous market, five times larger than Korea. It is also located near Korea and shares some cultural similarities. About 570,000 Korean residents who can act as a bridge are also living in Japan. Although the wall is high, achieving successful entry would guarantee a stable market.
There have been some encouraging signs this year. Korea’s exports to Japan went up by 46 percent over eight months in comparison to the same period last year. The explosive popularity of Korean pop culture, namely the Korean Wave, is also helpful. For instance, sales of a red vinegar product with the popular girl group KARA increased by about 10 times recently.
Korean component makers are also seeing good opportunities in Japan as the yen remains strong and Japanese companies are purchasing components from overseas. Big automakers have already begun buying Korean components regularly - and this is a great example of how today’s Japan is an emerging market for Korea.
Shin Kak-soo, Korean ambassador to Japan
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