Powerful neighbors are but a blessingRecently, I visited a plant in Weihai, China, operated by DMS, the world’s No. 1 LCD cleansing-equipment manufacturer. As business in China expanded, the company moved all factory facilities from Hwaseong, Gyeonggi, to China early last year. Research and development also moved to China. In fact, the business is doing so well that Park Yong-seok is considering filling up the pond in the plant to expand production lines. Orders for cleansing equipment are surging as China drastically increases LCD production. Everything is going well. But I wondered what would happen if China reduced LCD production or developed its own technology.
The bidding for a downtown duty-free shop contractor is in full swing. Applications were closed on June 1, and new operators will be approved mid-July. Three sites are to be selected, and 21 companies applied. The competition means profitability. In fact, Lotte Department Store’s main branch uses 10 floors, excluding the restaurants and food courts, and total revenue last year was 1.8 trillion won ($1.63 billion). The duty free shop, which takes up three floors in the same building, had 1.9 trillion won in revenue. And the net profit of the duty-free shop is twice that of the department store.
These two stories show the energetic side of the Korean economy. But they symbolically illustrate how the Korean economy is dependent on China. The duty-free shopping sector absolutely depends on Chinese customers.
So why are China’s exports decreasing lately? Because China is importing less. Why did four Korean oil companies see 2.7 trillion won in operating losses last year? Because Chinese companies expanded local production.
At the national science and technology consultation meeting on Friday that was presided over by President Park Geun-hye, the Ministry of Science, ICT and Future Planning, a strategy was presented to promote the unmanned vehicles industry, which includes drones. The government is eager to provide national-level support. But are they aware that DJI, a Chinese venture company less than 10 years old, has taken more than 70 percent of the commercial drone market worldwide? When officials were photographed with the president to mark the occasion, China was already making money.
And there are many more cases just as pathetic. The passion and courage that our fathers’ generation had when they built the 14th-largest economy from nothing has long been lost. The businesspeople who work for the country and the civilians and civil servants who take pride in patriotism are nowhere to be found.
Nevertheless, we try to console ourselves, believing that as China grows more powerful, Korea will become stronger as well. We have experience growing alongside Japan as it emerged into a world power. Yet, I still believe that having a powerful neighbor is a blessing.
The author is a business news reporter of the JoongAng Ilbo. JoongAng Ilbo, June 3, Page 30
by KIM JUN-HYUN