Fighting China’s influence
Korea’s duty-free shopping market is the largest in the world. Cosmetics retailers in Myeong-dong, central Seoul, grew from 38 to 127 over two years and six months. In the last three years, tourist hotels in Seoul have increased by 45 percent.
What is the common cause of these changes? The answer is very easy. It’s all thanks to the exploding number of Chinese tourists in Korea.
In fact, China has contributed to a considerable portion of Korea’s economic growth since the mid-1990s. China has been Korea’s biggest export partner since 2003, surpassing the United States. And its presence is growing in finance, too. China is the third-largest investor group in the domestic stock market after the United States and Japan, and a major investor in games, films, the drama industry and corporate M&As.
We are in luck to have such a solid friend in the neighborhood. But fortune and misfortune are like two sides of the same coin. Gratitude to China could turn to blame in no time. In fact, it is in progress.
The latest report by the Federation of Korean Industries aggravates our anxiety. When comparing Korea’s top 10 export products in eight industries in terms of global market share with China, China has surpassed Korea in six industries. China had a bigger market share not only in the shipbuilding and marine, petrochemical, oil refining and steel industries, but also in smartphones and the automobile industry. Korea had slight dominance in only semiconductors and displays.
But what’s more serious than China’s emergence is our internal confusion. In 1995, Samsung Chairman Lee Kun-hee earned the fury of the Kim Young-sam administration by saying, “Korea’s corporate sector is second-class, its administration is third-class and its politics is fourth-class.”
But Korea could have accomplished so much despite fourth-class politics because its economy, or more precisely its companies, has supported the country. But now the economy has lost direction. Let’s look at the top 10 and top 20 Korean companies. Not many are world-class corporations. Samsung and Hyundai Motors are considered industry leaders, but they are also struggling.
Writer Bok Koh-ill mentioned Korea’s “Finlandization” in his book, “China’s Shadow over the Korean Peninsula.” Finlandization refers to the process of Finland surviving under the powerful influence of the Soviet Union since 1944. Bok discussed the possibility of Korea becoming like Finland under China’s influence, but argued that Korea would not be “Finlandized” unless we respond foolishly.
Are we really responding wisely? Do we have the diplomatic capacity to make appropriate concessions while pushing for our demands? Do we have national consensus and unity? I am not so sure. Korean society is in a chaos of ideological and generational discord. The government’s coordination and control have revealed their limits.
Finland escaped from Finlandization as the Soviet Union collapsed in 1991. But China is not likely to collapse and is becoming more powerful day by day. The 500-year-long challenge the Joseon Dynasty (1932-1910) experienced has returned.
*The author is a deputy business news editor of the JoongAng Ilbo.
JoongAng Ilbo, Dec. 17, Page 34
By KIM JUN-HYUN