Lecture III N-South Korean Reunification, Economic Integration in the Far East Asia, and Korean Wave
Assumptions on Reunification 1) Peaceful unification 2) Its Economic Benefit 3) Unified govnt s Deficit
Benefits of Reunification Defined as econ and non-econ profit from RU. N Korea s benefit would be the largest. KIEP forecasts: NK GDP growth increases by 16% while SK by 1% Non Eco benefits: Lessened military tension and recovering homogeneity bwtn N-K people
Benefits of Reunification Reunification also gives benefits to Cs around Korea. China: $300.9 Billion Japan: #24.4 Billion Russia: $13.6 Billion (World Input-Output Table) Free trade btwn China, Russia, and Korea will further increase benefit.
Economic Benefits of Neighbor Countries for Korean RU (단위: 억 달러, 천 명) 시나리오 Ⅰ 시나리오 Ⅱ 총 산출 GDP 對 통일한국 수출 고용 총 산출 GDP 對 통일한국 수출 고용 일본 684 246 256 21.0 244 86 171 7.4 중국 1,742 485 552 564.1 3,009 841 799 905.3 미국 660 291 285 23.3 379 148 206 13.0 러시아 160 74 56 77.2 136 64 52 71.6 주: 통일 시나리오 Ⅰ: 한반도 평화통일, Ⅱ: 한반도 평화통일 후 통일한국과 중국 간 경제협력 증대 자료: KIEP(2014), 표 5
Cost of Reunification Includes all costs related to build up political, social, and economic system stabilization. Different depending on est methods and assumptions Max: $600 Billion, Min: $50 Billion It is the sum of cost until NK personal income reaches a certain target level. Faster and delayed reunification increases costs.
Cost of Reunification There will be a huge cost in adjusting NK people to liberalized mkt economy: different prod. tech, social system, working condition, and self-reliance capacity For promoting NK people s equal opportunities is reunified economy, basic knowledge on mkt, corporation, and entrepreneurship are required. Ownership and property rights
Length of Transition About 20 yrs are needed Russian case: 15-20 yrs for transition from communist sys to mkt sys Russia had unstable situation due to prompt progress to mkt sys in 1990s. GDP/person decreased Therefore progress to mkt sys has been earnestly started in 2000s.
Length of Transition CIS had similar experience. As an early stage of mkt sys, China started reform of rural area in 1980s. Transition to mkt sys ended in China with massive pub. companies restructuring.
Real GDP of Russia and CIS After Collapse of SU
Length of Transition CIS had similar experience. As an early stage of mkt sys, China started reform of rural area in 1980s. Transition to mkt sys ended in China with massive pub. companies restructuring.
More about the Benefits of RU In 2000s, NK s econ growth rate avg about 1% NK s growth will stay around this level as long as they pursue the socialist s system. If NK is progressing to step by step RU, NK s economic size (GDP) will many other Asian countries. In 2035, NK eco size will exceed ASEAN. By 2050, it will be larger than Indian eco.
Forecast of NK GDP and Relative Size of Economy
More about the Benefits of RU In 2055, N-S combined GDP will be $8.7 Trillion. Reunified N-S Korea will be a major economic power in global economy. Trade size with neighbor countries will be increased over 300%.
Economic Integration for Geographical Closeness Mongolia Hong Kong
Economic Dependence between Far East Asia Countries China (2014) - Export: $ 2.34 Trillion U.S. H.K. Japan S. Korea 16.9% 15.5% 6.4% 4.3% - Import: $ 1.96 Trillion S. Korea Japan U.S. Taiwan Germany Australia 9.7% 8.3% 8.1% 7.8% 5.4% 5.0%
Economic Dependence between Far East Asia Countries Japan - Export: $ 710.5 Billion U.S. China S. Korea H. K. Thailand 18.9% 18.3% 7.5% 5.5% 4.5% - Import: $ 811.9 Billion China U.S. Saudi Arabia Australia UAE S. Korea Qatar 22.3% 9% 5.9% 5.94% 5.1% 4.1% 4.1%
Economic Dependence between Far East Asia Countries Korea (2014) - Export: $ 572.7 Billion China U.S. Japan H. K. Singapore 25.4% 12.3% 5.6% 4.8% 4.2% - Import: $ 525.5 Billion China Japan U.S. Saudi Arabia Qatar Germany 17.1% 10.2% 8.7% 7.0% 4.9% 4.1%
Economic Dependence between Far East Asia Countries Hong Kong (2014) - Export: $ 528.2 Billion China U.S. 53.9% 9.3% - Import: $ 560.2 Billion China Japan Singapore S. Korea 47.1% 6.9% 6.2% 4.2%
Economic Dependence between Far East Asia Countries Taiwan (2014) - Export: $ 318 Billion China H. K. U.S. Japan Singapore 27.1% 13.2% 10.3% 6.4% 4.4% - Import: $ 277.5 Billion Japan China U.S 17.6% 16.1% 9.5%
Economic Dependence between Far East Asia Countries Mongolia (2014) - Export: $ 5.8 Billion China 95.3% - Import: $ 5.2 Billion China Russia S. Korea Japan 41.5% 27.4% 6.5% 6.1%
Economic Integration in Far East Asia Countries Conflicts of economic benefits (economic integration) and political difficulty (Japan s wrongdoings in the past) Beyond simple economic integration through free trade, integration of currency is also discussed. Considering the huge size of intra-regional trade, integration of currency would be beneficial to every regional country.
Economic Integration in Far East Asia Countries For beneficial currency integration, the following condition should be satisfied. 1) Member countries should share the same direction of economy: economic growth, oil shock, U.S. economy, and EU economy, and etc. 2) The mobility of production factor (labor and capital) should be high. 3) Price and wage are flexible enough to adjust the market.
Economic Integration in Far East Asia Countries What about the three countries condition on these requirements for currency integration? China, Japan, Korea, HK, Taiwan, and Mogolia
Economic Integration in Far East Asia Countries It is also important that the member countries share similar stage of economic growth and economic policy target. The above similarity causes less conflicts in maintaining currency integration. China: $ 12,900/person Japan: $ 37,400/person Taiwan: $45,900/person Korea: $ 35,300/person H.K.: $54,700/person Mongolia: $11,900/person
Economic Integration in Far East Asia Countries According to recent studies, the three countries comparative intra-regional trade exceeds that of EU member countries. However, the lack of political leadership and no experience with supranational organizations (like ECB) would be serious barrier to economic integration.
Vie for Global Economic Leadership: Japan and China RCEP (Regional Comprehensive Economic Partnership): China and Korea TPP (Trans-Pacific Partnership): US and Japan ADB (Asian Development Bank): US and Japan AIIB (Asian Infrastructure Investment Bank): China FTA (Free Trade Agreement): China, Korea, Japan, Taiwan, Hong Kong, and Mongolia
1st gen KW in 1997: What is Love? and HOT
2nd gen KW in 2000s: SM town Paris Show and KPOP, 2011
2nd gen KW in 2000s: Drama Dae Jan Geum
3rd gen KW in 2010s: PSY Kang Nam Style
3rd gen KW in 2010s: Girls Generation
Main Features of Each gen KW 구분 한류 1.0 한류 2.0 한류 3.0 시기 1997년~ 2000년대 중반 2000년대 중반~ 2010년대 중반 2010년대 초반 이후 특징 한류의 태동 영상콘텐츠 중심 한류의 확산 아이돌스타중심 한류의 다양화 핵심장르 드라마 K-POP K-Culture 장르 드라마, 영화, 가요 대중문화, 일부 문화예술 전통문화, 문화예술, 대중문화 대상국가 아시아 아시아, 유럽 일부, 아프리카, 중동, 중남미, 미국 일부 전 세계 주요 소비자 소수의 마니아 10~20대 세계 시민 주요매체 케이블 TV, 위성 TV, 인터넷 YouTube, SNS 모든 매체
Broadcast Contents EX Rapid increase over 2002 to 2008. Growth was 87.6%/yr After 2008, EX is sluggish and then recovered in 2010. 2011 s EX $228 million with 42,250 pieces. Japan (64.3%), Taiwan (10.9%), China (10.5%), SG (2.5%), and HK (1.9%) Drama (81.9%), Documentary (11.5%), Entertainment (5.1%)
방송콘텐츠 연도별 수출 현황 (2005~2011) 25,000 21,494 (단위: 만 달러) 22,789 20,000 15,000 12,349 14,774 16,258 18,016 18,358 10,000 수출액 5,000 2005 2006 2007 2008 2009 2010 2011
방송콘텐츠 지역별 수출 비중 (2011) 64.3 (단위: %) 10.9 10.5 2.5 1.9 1.8 0.9 0.3 6.9 Japan Taiwan China Singapore Hong Kong North America Europe Middle East Others 자료: 포켓 판매액, DVD 판매액, 패키지 수출금액을 제외한 2억 373만 달러 기준
Music (KPOP) Contents EX 2011 s EX exceeded $100 m Huge increase in the late 2000s. 2011 s EX growth against 2008 was 1,091% As of 2011, Japan (80.5%), South Asian (13.1%), China (3.5%), Europe (2.4%), America (0.3%)
음악산업 연도별 수출 현황 (2005~2011) (단위: 만 달러) 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - 수출액 2,227 1,666 1,388 1,646 19,611 8,326 3,126 2005 2006 2007 2008 2009 2010 2011
음악산업 연도별 수출 현황 (2005~2011) 80.5 (단위: %) Japan 13.1 South-East Asia 3.5 2.4 0.3 0.2 China Europe North America Others
Animation Contents EX Steady Increase from 2008 2011 s EX: $115.9 m. 19.7% growth against 2010. America: 51.2% Europe: 24.6% Japan: 18.7% China: 1.5% South Asian: 1.0%
애니메이션산업 연도별 수출 현황 (2005~2011) 12,000 (단위: 만 달러) 11,594 10,000 8,000 7,842 6,683 7,277 8,058 8,965 9,682 6,000 4,000 2005 2006 2007 2008 2009 2010 2011
애니메이션산업 지역별 수출 현황 (2011) 51.2 (단위: %) 24.6 18.7 1.5 1 3 North America Europe Japan China South-East Asia Others
Movie Film EX Rapid increase over 2002 to 2005. Decreased after 2005. Began to increase from 2011: $15.8 m Japan (23.1%), US (10.4%), Germany (9.4%), China (6.3%) Rapid growth to China due to increased popularity
영화산업 연도별 수출 현황 (2005~2011) 8,000 6,000 7,599 (단위: 만 달러) 4,000 2,000 2,451 2,439 2,103 1,412 1,358 1,582-2005 2006 2007 2008 2009 2010 2011
영화산업 지역별 수출 비중 (2005~2011) 23.1 (단위: %) 20.4 10.4 9.4 6.3 5.9 5.9 5.1 4.9 4.5 3.9 Japan U.S. German China France Taiwan Singapore U.K. Tailand Hong Kong Others
Game (PC and Smart Phone) EX 2011 s EX: $ 2.37 B 58% of all contents EX High operation profit ratio: 19% while other contents avg: 4% Steady increase after 2006 China (38.2%), Japan (27.4%), South Asia (18%), America (7.6%), Europe (6.4%)
게임산업 연도별 수출 현황 (2005~2011) (단위: 만 달러) 250,000 237,807 200,000 150,000 100,000 56,466 67,199 78,100 109,386 124,085 160,610 50,000-2005 2006 2007 2008 2009 2010 2011
게임산업 지역별 수출 비중 (2011) 38.2 27.4 18 (단위: %) 7.6 6.4 2.4 China Japan South-East Asia North America Europe Others
Other Korean Wave Products Korean Fiction Korean Fashion Korean Food Korean Language