TED, answer to the Korean economyThe National People’s Congress is in progress in Beijing, China, and high-ranking party executives and government officials are hosting news conferences to explain the new policies.
One of the most frequently mentioned phrases is “shift of economic growth paradigm.” China wants to focus on service over manufacturing industry, domestic consumption over export and spending over investment. In the Xi Jinping era, the grand paradigm of the Chinese economy is changing.
And the change means a challenge to Korean companies. We need to make a new business strategy to accommodate China’s changes. We need to take a hint from “TED,” a series of conferences that began in the United States and have spread around the world. TED stands for Technology, Entertainment and Design. These three fields are the key to business success in China.
I cannot emphasize enough how important technology is in Korea-China economic cooperation.
Dr. Lee Mun-hyeong of the Korea Institute of Industrial Economics and Trade has been researching the industrial division of the two countries. He points out that the iPhone 4 is manufactured in China, and the average manufacturing cost is $194. Some $80 of it goes to Korean companies that provide semiconductors and other parts.
Korea also has a competitive edge in the entertainment industry against China. We have a good chance of exporting “cultural products” based on creativity. Pororo the Little Penguin has been recently introduced to the Chinese market with the feature film, “Super Sleigh Adventure.” The maker of Pororo has received proposals for joint ventures from Chinese companies. “Nanta” is attracting Chinese tourists and Chinese youth rave over B-Boy performances. Also, the Confucian culture and tradition that has disappeared in China still lives on in Korea, and it can also be a cultural product.
We need to break away from the concept that China is the manufacturer. We have to seek new added values in the production and manufacturing process. Design is one of them.
Brand 36.5° is enjoying brisk business by supplying designs to a large Chinese apparel company. It took advantage of the fact that the Chinese company is strong in manufacturing but is relatively behind in fashion design. President Shin Hyeon-suk says that we are at a juncture to think about how to find added value in soft industry through brand planning, advertisement and marketing.
The paradigm shift of the Chinese economy is a crisis and an opportunity at the same time. The responses to the change may determine the fate of Korean companies. In the Xi Jinping era, TED is the answer to business with China. It also coincides with the “creative economy” advocated by the Park Geun-hye administration.
By Han Woo-duk
The author is the director of the China Institute of the JoongAng Ilbo.