Korean Economy?

[Japher]

Seeker: It is not so much that they will be dependent on an import, though this may happen as they become more and more specialized, it is more so that they will be dependent on exports that will cause problems.

[Japher]

A manufacturing economy can correct imbalances as easily as any other

How can a manufacturing economy correct imbalances due to lack of raw materials or demand without increasing imports?

[Seeker]

DanS:

Health and Education not related to Employment.

Healthy fit workers add to the pool. Fat, sick workers raise taxes or raises costs to households lowering consumer spending and thus jobs.

Same for education. Smart workers earn more disposeable income, and are more flexible. Uneducated workers are less adaptable and their employers pay them much less.

The more your workers spend, hopefully the more jobs will be had as companies hire.

Is there some sort of study or something where a big brain showed this is not the case?

[DanS]

Japher: Truly, I'm stumped.

[Kidlicious]

Originally posted by DanS
It is harmful for Korean consumers to ignore these products and it encourages continued wealth destruction by subsidizing inefficient industry in-country.

Wealth destruction? Is that really happening in Korea? The Japanese created a **** load of wealth subsidizing exports, and I assume that Korea is doing the same thing, not destroying wealth.

I think it's the build up in wealth that creates the problems now days. There just aren't that many productive places for that wealth.

The biggest problem that Korea faces though is competition from China. I think the Korean economy will come down hard this decade.

[Seeker]

Lack of raw materials:

Such as? They make the high tech stuff themselves. They have lots of nuke and coal power.

Do you really think prices of raw commodities like steel, timber, copper etc are actually going to go up in the next 50 years!?

Specialized: They make most things. Korean manufacturing is more diverse than Canada.

Demand:
They supply the domestic demand. What product do you see them importing in such large amounts that they can't make themselves? Pokemon?

However China and Viet Nam are causing waves and will probably force Korean wages lower. Like I mentioned on Apolyton earlier, one of my adult students must relocate his steel mesh factory to viet nam for lower wages. Remember though that Chinese wages are ALSO rising, they could be at the Korean level in a decade.

[Japher]

They're going to have to diversify their economy into services or they're going to see it crash in the next 30 years

I agree with this, as services require less resources and our not as specialized. Even in the US services account for 40-50% of the economy and/or buisness types. I am not saying that the US has a great economy or the best buisness model associated with it. Yet, it has survived for a very long time. Why?

1. Large Amounts of Natural Resources
2. Diversified Economy which comes naturally through a competitive "free" market
3. Foreign Trade

The last of which, IMO, is the most important. If you are going to have a purly manufacturing economy you will need to rely heavily on foreign trade. The problem with that, however, is that your economy is now in the hands of those countries with whom you trade with, and that sucks. What if that country has a depression/recession or a stutter in the economy? What if that country goes to war? What if that country raises tarrifs on you because your aren't importing enough to counter balance their economy to the levels the want or are impossing too much competition?

[Kidlicious]

Originally posted by Seeker
Remember though that Chinese wages are ALSO rising, they could be at the Korean level in a decade.

I don't think so. There is a lot of unemployment in China, and a lot of capital is used with the labor there. There isn't as much upward pressure on wages as people think.

[Japher]

Do you really think prices of raw commodities like steel, timber, copper etc are actually going to go up in the next 50 years!?

You don't?

Specialized: They make most things. Korean manufacturing is more diverse than Canada.

It's about being specialized towards manufacturing (only making things), not towards what the make.

Demand:
They supply the domestic demand. What product do you see them importing in such large amounts that they can't make themselves? Pokemon?

Exactly my point. Production without consumption.

[Seeker]

My version might be:

1. Large and small investors with high risk tolerance (perhaps less nicely, greater fools with greater capital. A world where AOL could buy Time Warner)

2. Perception of stability: Since the civil war there has never been a fear that the government would suddenly take private assets from people, and the feeling that the government will always be there.

3. Competitive spending culture. The average Korean household cannot approach the typical yearly spending as a percentage of income that Americans do, even with nearly 50% of the 18-49 population in credit default. Americans just BUY MORE of everything. I don't know why.

[Seeker]

Oh well, my Korean economy thread has becomed hijacked by America economy.


typical

[Alinestra Covelia]

What I find most interesting is that Daewoo, the company known for its household electronics and automobile production, once designed and produced a fully functional JackHammer Bullpup configured fully automatic momentum-operated repeating shotgun for military field use.

That really hits my funny bone each time I think about it.

[DanS]

as services require less resources and our not as specialized

Do you even think about what you say before you say it?

Services are often highly specialized and sometimes require a lot of resources.

[Az]

That's ok. We have a factory here that does pots kettles and mortars.

[DanS]

Re Korean cars, and to beat a dead horse, they're generally awful. Kia sucks the worst. I mean bad, in sort of a monumental kind of way--approaching Yugo status. Daewoo not far behind. It's a shame that Koreans have to put up with this stuff, whether by inclination or law.

http://money.cnn.com/2003/07/08/pf/autos/bc.autos.durability.reut/index.htm