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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: RealMuLan who wrote (26940)	4/5/2005 5:58:47 PM
From: RealMuLan	Read Replies (1) of 116555

Technology Gap With China Narrowing Faster By Seo Jee-yeon Staff Reporter A local survey on Tuesday predicted that the technology gap between South Korea and China could disappear within three or four years, which is faster than the government’s expectations. In a survey of 58 Korean business people in China, the Institute for Global Economics (IGE) found that 36 percent of the respondents believe that the level of technology in China might be on equal footing with Korea within three to four years. This is one or two years faster than the Ministry of Commerce, Industry and Energy’s projection. The ministry estimated that by 2010, China could overtake Korea in core industries, including steel and digital electronics. About 26 percent of those surveyed said it might take five to 10 years for China to catch up with Korea in technology. The survey also showed that the primary reason for entering the Chinese market was not for cheap labor. About 52 percent of respondents said they went to China to tap the local market, followed by the cheap labor cost with 33 percent. When asked about the impact of the possible appreciation of the Chinese yuan on profits of Korean companies in China, 41 percent said their profits could deteriorate while 40 percent said the impact could be small. As for the business performance of Korean firms in China, the survey showed that two-thirds of respondents posted a surplus or will achieve a surplus in the near future. About 7 percent said they have suffered a chronic deficit. About 92 percent said they will expand investment in China or maintain the current investment level. Regarding tasks in trade policy with China, 33 percent said they need government support for doing business in China, followed by the cultivation of China specialists at the governmental level with 17 percent. The majority of the respondents, or 74 percent, predicted that the developing Kaesong Industrial complex in North Korea will not replace China in the near future as the site for plant relocation. jyseo@koreatimes.co.kr 04-05-2005 16:05 times.hankooki.com

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