tag:blogger.com,1999:blog-350533602024-02-18T20:40:46.880-05:00Assignment: SeoulArticles about Korea for fans of Assignment: SeoulProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.comBlogger381125tag:blogger.com,1999:blog-35053360.post-61800543565442832242015-01-23T17:54:00.002-05:002015-01-23T17:54:18.784-05:00South Korean Consumers: Patriotism or Prices<span style="font-size: xx-small;">http://www.economist.com/news/business/21639579-locals-fed-up-paying-over-odds-are-shopping-abroad-won-over</span><br />
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WHEN South Korean celebrities, eager to prove their patriotism, swapped their German BMW cars for home-grown Hyundais on television, during the Asian financial crisis in 1998, they rallied the whole nation behind domestic products. To wean South Koreans off their Coke and Pepsi, a local firm launched “815 cola”, commemorating Korean liberation from Japan on August 15th 1945. American trainers were out, and hitherto uncool local brands were in. Hyundai’s financial arm created a “Buy Korea” fund, to get South Koreans to invest in local companies; and in its first three months it attracted more than 12 trillion won (then $10 billion).</div>
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However, such appeals to patriotism seem to have run their course, and South Koreans have rediscovered their fascination for all things foreign. What has prompted them to rethink is a growing awareness of how much more they pay for things than foreigners do—and not just because of high tariffs—and how easy it has become to import cheap stuff.</div>
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Take cars, for example: in September <em class="Italic">MotorGraph</em>, a local trade magazine, conducted a poll of 1,800 South Koreans asking them why they hated Hyundai and its sister company, Kia. Almost half said they felt discriminated against in their home market. The Fair Trade Commission, a watchdog, is investigating a complaint from a parliamentarian that Hyundai is selling its new Genesis luxury saloon at a 13m-won markup at home compared with some export markets.</div>
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In 2013 Consumers Korea, a lobby group, surveyed how much 60 products cost in each of 15 rich countries. For more than half of them South Korea was in the top five priciest places. It was the third most expensive for Heineken beer, and the fifth for Chanel perfume. But most tellingly, all three South Korean products in the sample were more expensive in their home country than anywhere else.</div>
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South Koreans have been paying over the odds, especially for local goods, for decades. In the 1960s Park Chung-hee, a military strongman who oversaw an industrial boom, encouraged the overpricing of local products to subsidise exports, partly by sealing off the country to foreign brands. Even into the 1990s, buying Thai-made kitchenware or stationery from Japan (whose cultural products were banned in South Korea until 1998) was still considered a national betrayal.</div>
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Among the first signs that patriotic propaganda was losing its effectiveness came in 2009, when Apple launched the iPhone in South Korea. Samsung fought back by promoting its Omnia 2 mobile as “the pride of South Korea” and local media weighed in with negative reviews of its American rival. Yet Apple went on to seize a quarter of the country’s smartphone sales in one year. More recently, a petition by local grocers last March, calling for a boycott of popular Japanese-branded products, such as beer and cigarettes, flopped.</div>
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In the past three years South Korea has implemented a series of trade-liberalisation deals with 50-odd other countries (including the European Union’s member states). As a result of these, Koreans now have more choices than ever. In 2014, for the first time in many years, the value of imported European cars is thought to have exceeded the South Korean carmakers’ combined export earnings. One in ten locals now owns a foreign car, up from about one in 100 a decade ago. </div>
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Remarkably for a nation where anti-Japan sentiment runs high, Toyota’s Camry saloon won the </div>
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South Koreans have discovered that they can save a fortune by shopping on foreign websites. They are clicking away merrily on Amazon and a Chinese counterpart, Taobao, buying clothes, toys and electronic gadgets, including “Made in Korea” ones. The value of direct buying from overseas doubled to 1.1 trillion won between 2011 and 2013. In 2014 the government doubled the maximum value of goods that can be shipped tax-free into the country from America, to $200, giving direct foreign purchasing a further boost.</div>
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The government has recognised that exclusive distribution deals, in which a small number of retailers control all sales of a branded product within the country, are also inflating the prices of some foreign-made goods in local shops. To try to bring down the cost of living, it has simplified online payments and introduced a system in which the customs service authenticates copies of those products imported by other distributors, undermining the exclusivity agreements. That again is increasing the pressure on locally made goods and local retailers.</div>
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With more on offer, South Koreans now shop chiefly for value: they are picky, discerning and resent being duped, says Han Sanglin, a business professor at Hanyang University in Seoul. And they are not shy about expressing their views. A group of students recently rode a makeshift raft held afloat only with packets of Korean-branded crisps, in protest at their meagre contents. They derided the puffed-up, near-empty packs as “nitrogen snacks”.</div>
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South Korean firms argue that the products they sell to locals are often more sophisticated versions of those they export; and that their prices include delivery, installation and long warranties. But they are having to work harder to stop customers deserting them. Lotte, a big local retailer, will this year start opening a new type of outlet that sells foreign clothes at prices comparable with online shops’.</div>
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Having had an easy time in their home market for so long, many South Korean firms must now learn to be competitive. Jun Shin of the Seoul office of McKinsey, a consulting firm, says the country’s successful cosmetics firms are good role models: they have long offered high-quality products at modest prices, and as a result they have managed to keep their foreign rivals at bay.</div>
ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-23084396512937664842014-10-02T10:25:00.000-04:002014-10-02T10:25:27.674-04:00Why South Korea is so distinctively Christian<a href="http://www.economist.com/blogs/economist-explains/2014/08/economist-explains-6"><span style="font-size: xx-small;">http://www.economist.com/blogs/economist-explains/2014/08/economist-explains-6</span></a><br />
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SOUTH KOREA, a dynamo of growth, is also afire with faith. This week Pope Francis will spend five days there, for Asian Youth Day and to beatify 124 early martyrs. About 5.4m of South Korea’s 50m people are Roman Catholics. Perhaps 9m more are Protestants, of many stripes. Yoido Full Gospel Church’s 1m members form the largest Pentecostal congregation on Earth. Belief’s farther shores include the Unification Church, soon to mark the anniversary of its founder Sun-myung Moon’s "ascension". The late <span>Yoo Byung-eun</span>, the shifty and versatile tycoon behind the ferry <em>Sewol</em> which sank in April, killing 304 mostly teenage passengers, had also founded his own sect (and the website God.com, now in other hands); its followers hid him during Korea’s largest-ever police man-hunt.<br /><br />All this is particularly striking, because Asia is mostly stony ground for Christianity. Spanish rule left the Philippines strongly Catholic, but Korea is less simple. In the 18th century curious intellectuals encountered Catholicism in Beijing and smuggled it home. Confucian monarchs, brooking no rival allegiance, executed most early converts: hence all those martyrs, ranking Korea fourth globally for quantity of saints. Protestantism came later and fared better. By the 1880s Korea was opening up, and the mainly American missionaries made two astute moves: opening the first modern schools, which admitted girls; and translating the Bible into the vernacular Hangul Korean alphabet, then viewed as infra dig, rather than the Chinese characters favoured by literati.<br /><br />The seeds thus sown incubated under Japan’s rule (1910-45), and have sprouted wildly since. The trauma of Japanese conquest eroded faith in Confucian or Buddhist traditions: Koreans could relate to Israel’s sufferings in the Old Testament (no <a href="http://en.wikipedia.org/wiki/Joseon">Chosen</a> jokes, please). Yet by 1945 only 2% of Koreans were Christian. The recent explosive growth accompanied that of the economy. Cue Weber’s Protestant ethic: for the conservative majority, worldly success connotes God’s blessing. But Korea also bred its own liberation theology (<em>minjung</em>), lauding the poor and oppressed. Rapid social change often produces spiritual ferment and entrepreneurs like Moon and Yoo: saviours for some, to others charlatans. Prophet and profit can blur: both men did time for fraud. Even Yoido’s founder, David Cho, was convicted in February of embezzling $12m. But these are rare outliers.<br /><br />Today 23% of South Koreans are Buddhist and 46% profess no belief. Does this represent scope for Christianity's growth, or incipient secularisation? In 2012 only 52% claimed to be religious, down from 56% in 2005. But the world is now their oyster: only America sends more missionaries. Korean Christians have been seized in Afghanistan, beheaded in Iraq and stopped by their embassy from hymn-singing in Yemen. Many work undercover in China. Some, riskily, help North Koreans to flee: as many as 1,000 have reportedly had their Chinese visas cancelled. Others have a grander ambition, to spread Christianity in the North. In Japanese days Pyongyang was a Protestant hotbed, and now some are back, running the private Pyongyang University of Science and Technology, which since 2010 has been educating North Korea’s future elite; strictly no preaching. Given Korean Christians’ energy and tenacity, it is a sure prophecy that one day the Pyongyang skyline will be as studded with neon crosses as Seoul’s.ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-16264284854516707252014-10-02T10:22:00.002-04:002014-10-02T10:22:28.348-04:00Why so many Koreans are called Kim<a href="http://www.economist.com/blogs/economist-explains/2014/09/economist-explains-5"><span style="font-size: xx-small;">http://www.economist.com/blogs/economist-explains/2014/09/economist-explains-5</span></a><br />
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A SOUTH KOREAN saying claims that a stone thrown from the top of Mount Namsan, in the centre of the capital Seoul, is bound to hit a person with the surname Kim or Lee. One in every five South Koreans is a Kim—in a population of just over 50m. And from the current president, Park Geun-hye, to rapper PSY (born Park Jae-sang), almost one in ten is a Park. Taken together, these three surnames account for almost half of those in use in South Korea today. Neighbouring China has around 100 surnames in common usage; Japan may have as many as 280,000 distinct family names. Why is there so little diversity in Korean surnames?<br />
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Korea’s long feudal tradition offers part of the answer. As in many other parts of the world, surnames were a rarity until the late Joseon dynasty (1392-1910). They remained the privilege of royals and a few aristocrats (yangban) only. Slaves and outcasts such as butchers, shamans and prostitutes, but also artisans, traders and monks, did not have the luxury of a family name. As the local gentry grew in importance, however, Wang Geon, the founding king of the Goryeo dynasty (918–1392), tried to mollify it by granting surnames as a way to distinguish faithful subjects and government officials. <br />
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The gwageo, a civil-service examination that became an avenue for social advancement and royal preferment, required all those who sat it to register a surname. Thus elite households adopted one. It became increasingly common for successful merchants too to take on a last name. They could purchase an elite genealogy by physically buying a genealogical book (jokbo)—perhaps that of a bankrupt yangban—and using his surname. By the late 18th century, forgery of such records was rampant. Many families fiddled with theirs: when, for example, a bloodline came to an end, a non-relative could be written into a genealogical book in return for payment. The stranger, in turn, acquired a noble surname.<br />
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As family names such as Lee and Kim were among those used by royalty in ancient Korea, they were preferred by provincial elites and, later, commoners when plumping for a last name. This small pool of names originated from China, adopted by the Korean court and its nobility in the 7th century in emulation of noble-sounding Chinese surnames. (Many Korean surnames are formed from a single Chinese character.) So, to distinguish one’s lineage from those of others with the same surname, the place of origin of a given clan (bongwan) was often tagged onto the name. Kims have around 300 distinct regional origins, such as the Gyeongju Kim and Gimhae Kim clans (though the origin often goes unidentified except on official documents). The limited pot of names meant that no one was quite sure who was a blood relation; so, in the late Joseon period, the king enforced a ban on marriages between people with identical bongwan (a restriction that was only lifted in 1997). In 1894 the abolition of Korea’s class-based system allowed commoners to adopt a surname too: those on lower social rungs often adopted the name of their master or landlord, or simply took one in common usage. In 1909 a new census-registration law was passed, requiring all Koreans to register a surname.<br />
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Today clan origins, once deemed an important marker of a person’s heritage and status, no longer bear the same relevance to Koreans. Yet the number of new Park, Kim and Lee clans is in fact growing: more foreign nationals, including Chinese, Vietnamese and Filipinos, are becoming naturalised Korean citizens, and their most popular picks for a local surname are Kim, Lee, Park and Choi, according to government figures; registering, for example, the Mongol Kim clan, or the Taeguk (of Thailand) Park clan. The popularity of these three names looks set to continue.<br />
ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-87246057925787601312014-09-28T18:53:00.001-04:002014-09-28T18:53:08.617-04:00As succession looms at Samsung, much has to change<a href="http://www.economist.com/news/business/21620195-succession-looms-korean-conglomerate-much-has-change-waiting-wings"><span style="font-size: xx-small;">http://www.economist.com/news/business/21620195-succession-looms-korean-conglomerate-much-has-change-waiting-wings</span></a><br />
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As succession looms at the Korean conglomerate, much has to change</h1>
<aside class="floatleft light-grey"><time class="date-created" datetime="2014-09-27T00:00:00+0000" itemprop="dateCreated"> Sep 27th 2014 </time> | <span class="location">SEOUL</span> | <a class="source" href="http://www.economist.com/printedition/2014-09-27">From the print edition</a> </aside><div class="main-content" itemprop="articleBody">
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“CHANGE everything except your wife and children.” Thus spoke Lee Kun-hee, the boss of Samsung, two decades ago at an emergency meeting with his senior managers. He wanted the conglomerate (whose name means “Three Stars”, implying that it would be huge and eternal) to stop churning out vast quantities of cheap products and focus on quality, to become one of the world’s leading firms.<br />
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Mr Lee (pictured, left) accomplished his mission, probably beyond his wildest dreams. Today the Samsung group, whose 74 companies have estimated annual revenues of more than 400 trillion won ($387 billion) and 369,000 employees, is into everything from washing-machines and holiday resorts to container ships and life insurance. But it is the group’s predominant electronics division that has made its patriarch particularly proud: Samsung has overtaken its Japanese rivals to become the world leader in this industry by revenues, outselling everyone in memory chips, flat-panel televisions and smartphones.<br />
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Now Samsung is again at a point in its 76-year history at which much has to change. This will be underlined if, as expected, Samsung Electronics issues a fresh profit warning shortly. The company is not facing existential threats. But the world around it is in flux, and Samsung has to adapt—from top to bottom.<br />
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Start at the top. In May Mr Lee, 72 years old, suffered a heart attack. He is still in hospital. Nobody expects him to return as he did in 2010, when he came back after avoiding prison for embezzlement and tax evasion. (He got off with a suspended sentence of three years and was later pardoned so he could remain a member of the International Olympic Committee.)<br />
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Mr Lee’s only son, Lee Jae-yong (pictured, right), looks certain to take control of Samsung’s main businesses, and his two daughters will run some smaller ones. The younger Mr Lee, now 46, joined Samsung Electronics in 2001 and ten years later had the title of vice-chairman. Other than a few bare biographical facts, little is known about him. “He is unproven as a manager,” says Chang Sea-jin, a business-school professor and author of “Sony vs Samsung”, a book about the two Asian tech giants. Despite Samsung’s best PR efforts, most Koreans still associate him with eSamsung, a disastrous internet venture.<br />
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Those who have met him call him approachable and unassuming—quite unlike his father, who is known for an imperial management style. When the elder Mr Lee visited factories, the red carpet was rolled out and employees were not allowed to look down on him from the windows. In 1995 he had thousands of faulty mobile phones and other devices burned and bulldozed in front of weeping employees.<br />
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His son’s more restrained personality may be just what Samsung Electronics, in particular, now needs. To thrive it must attract flighty technical talent and get along with partners. Sent to Silicon Valley to negotiate with Apple, a big customer for Samsung’s chips (and a rival in smartphones), young Mr Lee apparently managed to get along with the often prickly Steve Jobs. He was the only Samsung executive to be invited to Jobs’s memorial service.<br />
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The succession is unlikely to happen before another badly needed change is well under way: reforming the group’s Byzantine corporate structure. For example, the group’s holding company, which has just changed its name from Samsung Everland to Cheil Industries, owns 19.3% of Samsung Life, which owns 34.4% of Samsung Card, which owns 5% of Cheil. (See the illustration below for a simplified depiction.)<br />
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This corporate hairball has let the Lees exert control over the group with a stake of less than 2%. But for various reasons they are now likely to simplify it, explains Shaun Cochran, a longtime Samsung-watcher at CLSA, a broker. One is that the rules against such circular shareholding structures are being tightened. But the most immediate consideration is the imminent succession—and the resulting inheritance tax. The family will have to pay about six trillion won, according to some estimates, and needs to raise cash.<br />
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This also goes a long way towards explaining why Samsung denies any talk of a restructuring: the more it seems a sure thing, the higher the share price and thus the tax bill. Because of the complex ownership structures, some listed companies within the group trade at a discount. When news broke of the older Mr Lee’s heart attack, the shares of Samsung Electronics went up—mainly because a restructuring was seen as more likely.<br />
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Denials notwithstanding, the restructuring has clearly begun. Earlier this month Samsung Heavy Industries and Samsung Engineering announced plans to merge. This will be followed by the IPOs of Samsung SDS, a provider of IT services, perhaps as early as November, and of Cheil, which is expected early next year.<br />
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The flotation of Cheil is key, argues Mr Cochran. Unlike other group companies it is controlled directly by the Lee children and a family foundation. The listings will not only raise cash, but also make it easier to put values on the group’s cross-shareholdings. So it will be easier to unpick these without attracting lawsuits.<br />
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The sooner all this happens, the better: the restructuring is distracting executives from running their businesses. One, in particular, needs attention: smartphones. Not only has it been directly responsible for a big chunk of the profits at Samsung Electronics, and thus the group; it is also the biggest customer for other parts of the business, such as making chips and displays.<br />
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Samsung Electronics came from nowhere in the space of a few years, to grab one-third of the market for smartphones in 2012. It did so mainly by being among the first to bet on Android, Google’s popular mobile operating system, and by offering iPhone-like handsets at lower prices than Apple. Yet since then, problems have been piling up, and Samsung’s market share has now slipped to 25%, reckons IDC, a market-research firm. The Galaxy 5S, which Samsung introduced in January, was derided for its cheap plastic casing.<br />
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Low-cost makers from China, such as Xiaomi and Huawei, and new European brands such as Wiko and Archos, are attacking Samsung’s market from below. From above, Apple has regained share, and looks set to keep doing so after its recent launch of a “phablet”, a phone with a large screen—a category where Samsung still had an advantage. What is more, the smartphone market is maturing; indeed, in Britain it is already shrinking.<br />
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If fighting back were simply a question of making better hardware, Samsung would be safe. This is what it knows best, says Ben Wood of CCS Insight, another market researcher. Since it launched Galaxy Gear, a smart watch, a year ago, it has followed up with five further models. “Samsung is prototyping in public,” says Mr Wood. But smart watches also show why Samsung is in trouble. The Apple Watch, launched at the same time as the bigger iPhone, may look a lot like the Galaxy Gear, but it comes embedded in an ecosystem of software and services, such as a new touchless payment system and sophisticated health-monitoring apps.<br />
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Samsung will have a hard time matching such an ecosystem. It does not control Android, and an effort to establish its own mobile operating system, Tizen, seems to have been put on the back burner. Being structurally a hardware company, and one with a conformist Confucian culture, Samsung would surprise many if it suddenly came up with great apps and services.<br />
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So, the firm’s best chance is to stick with gadgets, and to try to create ones that consumers love so much that they fly off the shelves, argues Francisco Jeronimo of IDC. But it has to act fast. The fates of Nokia and BlackBerry (which made another attempt at a comeback on September 24th by launching a new smartphone, the Passport) show how quickly fortunes can reverse. And Apple sold 10m of its new iPhones, including an updated smaller model, in three days—a number that the Galaxy 5S only reached after 25 days.<br />
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In all, the younger Mr Lee has his work cut out for him. Samsung-watchers wonder if he has it in him, but when he takes over he may have to make a “change everything” speech of his own.</div>
ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-62329167870944054762014-05-24T21:09:00.001-04:002014-05-24T21:09:11.718-04:00Korean men are marrying foreigners more from choice than necessity<a href="http://www.economist.com/news/asia/21602761-korean-men-are-marrying-foreigners-more-choice-necessity-farmed-out"><span style="font-size: xx-small;">http://www.economist.com/news/asia/21602761-korean-men-are-marrying-foreigners-more-choice-necessity-farmed-out</span></a><br />
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IN THE mid-1990s posters plastered on the subway in Seoul, South Korea’s capital, exhorted local girls to marry farmers. Young women had left their villages in droves since the 1960s for a better life in the booming city. Sons, however, stayed behind to tend family farms and fisheries.<br />
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The campaign was futile. Last year over a fifth of South Korean farmers and fishermen who tied the knot did so with a foreigner. The province of South Jeolla has the highest concentration of international marriages in the country—half of those getting married at the peak a decade ago. In those days, the business of broking unions with Chinese or South-East Asian women boomed, with matches made in the space of a few days. Not long ago placards in the provinces sang the praises of Vietnamese wives “who never run away”. Now, on the Seoul subway, banners encourage acceptance of multicultural families.<br />
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They are expected to exceed 1.5m by 2020, in a population of 50m. That is remarkable for a country that has long prided itself on its ethnic uniformity. But a preference for sons has led to a serious imbalance of the sexes. In 2010 half of all middle-aged men in South Korea were single, a fivefold increase since 1995. The birth rate has fallen to 1.3 children per woman of childbearing age, down from six in 1960. It is one of the lowest fertility rates in the world. Without immigration, the country’s labour force will shrink drastically.<br />
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The government is the biggest enthusiast for a multi-ethnic country. Its budget for multicultural families has shot up 24-fold since 2007, to 107 billion won ($105m). Some 200 support centres offer interpreting services, language classes, child care and counselling. School textbooks now include a section on mixed-race families. And in 2012 mixed-race Koreans could join the army for the first time. When four Mongolians working illegally in South Korea pulled a dozen Korean colleagues from a fire in 2007, locals urged the government to grant them residency (it did).<br />
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Still, assimilation remains elusive. Four in ten mixed-race marriages break down in the first five years, according to a survey by the Korean Women’s Development Institute, a think-tank. In 2009 almost a fifth of children from mixed-race households who should have been in school were not. Many mothers have limited Korean. And discrimination lurks.<br />
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The government is now tightening up the marriage rules. Last month two new requirements came into force: a foreign bride must speak Korean, and a Korean groom must support her financially. Koreans are now limited to a single marriage-visa request every five years.<br />
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Critics say making marriage more difficult will only serve to speed up the greying of the workforce. The pool of eligible women will shrink, says Lee In-su, a marriage broker in Daegu in the south-east. Most foreign brides come from rural areas lacking language schools. Meanwhile, competition for brides from China, where men also outnumber women, is fierce.<br />
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In fact, the number of Korean men taking foreign brides is dropping, from 31,000 a year in 2005 to 18,000 last year. And nine-tenths of matches are now urban, says Mr Lee. Vietnamese girls no longer want to languish in the Korean countryside, says Kim Young-shin of the Korea-Vietnam Cultural Centre in Hanoi, Vietnam’s capital. They like watching Korean dramas and listening to K-pop—urban pursuits.<br />
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As for Korean clients, says Lee Chang-min, a broker in Seoul, they are increasingly better educated and better-off; some are among the country’s top earners. Many are simply on lower rungs of the eligibility ladder in a culture captivated by credentials, whether in looks, age or family connections. <br />
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Others, Mr Lee says, are wary of the stereotype of the <em class="Italic">doenjangnyeo</em> (a disparaging term for a class of Korean women seen as <em class="Italic">latte</em>-loving gold-diggers). They prefer a wife who can assume a more traditional role than one many Korean women are nowadays willing to play. These men, the brokers lament, are now more likely to be introduced to their foreign wives through friends than through brokers. Perhaps a modest win for melting-pot Korea after all.ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-40727713345812427092013-11-04T17:53:00.002-05:002013-11-04T17:53:23.814-05:00Seoul’s Tech Startups Look Overseas<a href="http://origin-www.businessweek.com/articles/2013-11-04/seoul-s-tech-startups-look-overseas"><span style="font-size: xx-small;">http://origin-www.businessweek.com/articles/2013-11-04/seoul-s-tech-startups-look-overseas</span></a><br />
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South Korea’s dominant chaebols—giant family-run conglomerates that include <span class="ticker_wrap"><span itemscope="" itemtype="http://schema.org/Corporation"><span itemprop="name">Samsung</span></span> (<a class="ticker" data-symbol="005930:KS" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=005930:KS">005930:KS</a>)</span>, <span class="ticker_wrap"><span itemscope="" itemtype="http://schema.org/Corporation"><span itemprop="name">LG</span></span> (<a class="ticker" data-symbol="066570:KS" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=066570:KS">066570:KS</a>)</span>, and <span class="ticker_wrap"><span itemscope="" itemtype="http://schema.org/Corporation"><span itemprop="name">Hyundai</span></span> (<a class="ticker" data-symbol="005380:KS" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=005380:KS">005380:KS</a>)</span>—generate more than 80 percent of the country’s exports and hire four in five of its graduating college seniors. Chaebols helped to drive South Korea’s transformation quickly and efficiently from agrarian poverty to the world’s 15th-largest economy in a few short decades. Now, though, a growing sense in Seoul is that the old model has lost its sheen. GDP growth slowed to 2 percent in 2012, and unemployment is now rising, especially among recent college graduates.<br />
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No one is suggesting that the chaebols’ influence will be eclipsed soon, but “policy leaders realize there needs to be a more diverse economy,” as Tom Coyner, of Soft Landing Consulting in Seoul, puts it. Shortly after taking office in February, South Korean President Park Geun-hye launched the new Ministry of Science, Information-Communication Technology, and Future Planning, which is charged with jumpstarting creative industries and assisting small businesses.<br />
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As home to the world’s fastest Internet download speeds, South Korea might seem a natural place for tech startups to thrive. Indeed, Seoul has a nascent startup scene, which benefits from exposure to the country’s tastemaking media and entertainment industries. Korean soap operas play on TV sets inside Chinese apartment blocks and Mongolian yurts, and satirical K-Pop star Psy’s <em>Gangnam Style</em> video became an international <span class="ticker_wrap"><span itemscope="" itemtype="http://schema.org/Corporation"><span itemprop="name">YouTube</span></span> (<a class="ticker" data-symbol="GOOG" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=GOOG">GOOG</a>)</span> sensation last year.<br />
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“Korea is big enough for a local market, but its size also forces you to think beyond,” says David Lee, the 33-year-old founder of Seoul’s Shakr Media, which runs video site shakr.com. He says that many Korean startups, like the country’s media companies, cater first to a domestic market. But because South Korea has just 50 million people, startups concerned about long-term growth need to think internationally from the get-go.<br />
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On shakr.com, developers can upload video templates for everything from weddings and children’s birthdays to real-estate sales. A user can insert personal photos into the template and download a low-res video for free or pay about $40 for an HD version. Since the website was launched on May 1, about 40 percent have chosen to pay for the higher-quality version. To date, Shakr has received about $2.4 million in seed funding from domestic and international investors, including Silicon Valley venture firm 500 Startups. Much of Lee’s growth plan centers around real-estate video templates for the U.S. market.<br />
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“It’s probably the best strategy to go international as soon as possible, without becoming dependent on the domestic market and inevitably bumping up against, or being subsumed by, the chaebols,” says Coyner, the consultant. He has seen many promising Korean startups sign lucrative but demanding contracts with chaebols, overextend themselves and lose focus, then have to cut back or go bankrupt. “There are plenty of good engineers and ideas in Korea. The problem is how to scale up without being absorbed.”ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-9540899011552583892013-10-28T06:24:00.000-04:002013-10-28T06:25:00.032-04:00Parallel Worlds: North and South Korea<a href="http://www.economist.com/news/special-report/21588197-38th-parallel-separating-north-and-south-koreas-most-important-dividing-line"><span style="font-size: xx-small;">http://www.economist.com/news/special-report/21588197-38th-parallel-separating-north-and-south-koreas-most-important-dividing-line</span></a><br />
<br />
The 38th parallel, separating north and south, is Korea’s most important dividing line. But it is only one of many, says Simon Cox<br />
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ON A RESTLESS night in April 1970, Lee Jae-geun, one of 27 South Korean fishermen aboard a trawler in the Yellow Sea, awoke from a nightmare. He had dreamt that Korea was struck by three titanic waves, each stronger than the last. The final wave swept aside mountains, deluged the country and left the land divided. It was, he thought, a bad omen.<br />
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And so it proved. A few nights later a North Korean patrol intercepted his trawler about 50 miles south of the Northern Limit Line, a disputed maritime border between the two Koreas. Armed patrolmen boarded the trawler and abducted its crew. Most of them were repatriated later that year, but the North Koreans had grander designs for Mr Lee, hoping to train him as a spy. It was three decades before he escaped.<br />
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The division between north and south remains Korea’s enduring tragedy. It was imposed in 1945 by the Allied powers that liberated the country from 35 years of cruel Japanese rule. In 1950 it was almost erased by a wave of North Korean troops that swept down the peninsula under the command of Kim Il Sung, a Soviet-backed ruler who outlasted the Soviet Union itself. Another wave of troops, mostly American but fighting under the United Nations banner, then reversed the North Korean tide. Eventually the UN forces succumbed to a third wave of Chinese troops which drove them back to the 38th parallel, a latitudinal reference line that still divides the two Koreas. Everybody ended up roughly where they had started.<br />
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On land the dividing line is painstakingly demarcated and heavily fortified. But at sea the border is both physically and legally indistinct, dogged by disputes, incursions and abductions. The South Korean government knows of over 500 of its citizens abducted since 1955 who are still missing.<br />
Mr Lee is no longer one of them, but the country to which he escaped is not the one he left behind decades ago. Its economy, politics and culture have all changed beyond recognition. As a teenager Mr Lee had served as an errand boy for Seoul’s police and knew every nook and cranny of the city. <br />
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But in the vast metropolis he returned to 30 years later, he “couldn’t tell left from right”, he says.<br />
When he was abducted, South Korea’s income per person was about $2,000 a year (at purchasing-power parity), roughly equal to North Korea’s at the time. As a fisherman, Mr Lee counted as comfortably middle-class. By the time he returned in 2000, South Korea’s income per person had grown almost tenfold (see chart). In 2010 the country became one of only 15 in the world with a GDP of over $1 trillion.<br />
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Two years after Mr Lee’s capture, Hyundai began work on a shipyard in Ulsan, Mr Lee’s southern home town. The yard is now the biggest in the world. Its red Goliath cranes hoist walls of steel measuring 20m by 40m in nine dry docks, making vast container ships and sophisticated drilling vessels for customers from 48 countries. Internationally competitive industries like these have helped make South Korea the world’s seventh-biggest exporter of goods.<br />
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And not only goods. Instead of the waves that haunted Mr Lee’s dreams, a Korean wave of films, music and soap operas has inundated Asia and begun to spread beyond. South Korea, so long subject to foreign influence, is now influencing others. One of its diplomats heads the United Nations. Lady Gaga wears its fashions. The South Korean rapper Psy created the most-watched YouTube clip ever. Even in Pyongyang, North Korea’s capital, South Korean music and drama circulates widely, if furtively, on memory sticks and DVDs. Youngsters are wearing their hair styled like their Southern cousins.<br />
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Back in 1970 South Korea was ruled by Park Chung-hee, whose daughter, Park Geun-hye, now holds the presidency. But in the intervening years the polity she heads has travelled almost as far as the economy. Her father came to power in a coup in 1961, then in 1972 dissolved the National Assembly and introduced a newly authoritarian constitution. His daughter, by contrast, won the presidency last December in a free and fair election, South Korea’s sixth since 1987. She racked up the highest share of the vote since her father’s victory in 1971.<br />
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If South Koreans want to remind themselves of the progress they have enjoyed, they need only look north, where men on average measure up to 8cm less and die 12 years sooner. North Korea’s Kim dynasty is now in its third generation, with power passing in 2011 to Kim Jong Un, who may not yet be 30 (no one is quite sure) but models his gestures and embraces on those of his grandfather, Kim Il Sung. The country’s output of cereals, which collapsed in the mid-1990s, has only just regained the level it reached in 1982. A visiting NGO hoping to improve yields on a collective farm had to dust off agricultural techniques that had not been used in the south for decades. To help its electrical equipment cope with the north’s wild swings in current, it had to order a voltage stabiliser not seen in the south since the 1980s.<br />
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In escaping to the south, Mr Lee achieved a personal reunification that still eludes his country as a whole. But he did not find it easy. In the north he had been a mechanic, making ships’ engines, but when he looked for similar work in the south he found that it was now done by machines. Still, his predicament is shared by many older South Koreans who have not managed to keep up with a now much more sophisticated economy.<br />
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South Korea does not make best use of these older workers, who constitute a growing proportion of the country’s population. It forces many of them to retire prematurely instead of retraining and re-educating them. By contrast, it overeducates its young, who toil away in expensive crammers and devote years to preparing for the university entrance exam. Families compete with each other in an educational arms race that is almost as ruinous as the military competition with the north. Extra qualifications are a ticket to the best jobs, and the best jobs are still concentrated in the government, the banks and the <em class="Italic">chaebol</em> (the big family-owned conglomerates).<br />
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South Korea’s working-age generation faces a triple burden. It must take care of older people, who are growing in number, younger people, who are expensive to educate, and perhaps eventually North Koreans, who will have to be integrated into the economy if the two Koreas are ever reunified. Daunted by these burdens, many South Korean women are delaying childbirth and having fewer children. The country’s fertility rate has fallen further and faster than in almost any other country. Its population, which surpassed 50m last year, is projected to fall below that number again by 2045.<br />
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Young South Koreans feel little connection with those on the other side</div>
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Many young South Koreans are trying to forget their ties to the north. Their grandfathers and great-grandfathers were preoccupied with the communist enemy, their fear and loathing kept alive by heavy propaganda during the years of dictatorship. The generation born in the 1960s, known as the 386 generation in homage to the Intel 386 microchip, was equally focused on the north, arguing that anti-communist fervour was making reconciliation and reunification impossible. Today’s southern youngsters, by contrast, feel little connection with the people on the other side of the 38th parallel. They are secretly relieved that for now reunification seems only a distant possibility. They do not burn with hatred for the north, nor do they romanticise it, as some older leftists used to do. They simply want to ignore it. But the north does not allow itself to be ignored.ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-29316091268457883862013-10-14T19:47:00.003-04:002013-10-14T19:47:54.131-04:00Google Jousts With Wired South Korea Over Quirky Internet Rules<a href="http://www.nytimes.com/2013/10/14/business/international/google-jousts-with-south-koreas-piecemeal-internet-rules.html?_r=0"><span style="font-size: xx-small;">http://www.nytimes.com/2013/10/14/business/international/google-jousts-with-south-koreas-piecemeal-internet-rules.html?_r=0</span></a><br />
<br />
SEOUL, South Korea — South Korea is one of the world’s most digitally advanced countries. It has ubiquitous broadband, running at speeds that many Americans can only envy. Its Internet is also one of the most quirky in the world. <br />
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A curfew restricts school-age children from playing online games at night; adults wanting to do so need to provide their resident registration numbers to prove that they are of age. </div>
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Until last year, commenters on the Web were legally required to use their real names. A simple Web search in Korean can be a fruitless experience, because the operators of many sites, including some government ministries, bar search engines from indexing their pages. </div>
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Travelers who want to go from Gimpo International Airport to the Gangnam neighborhood of Seoul cannot rely on Google Maps. Google Maps can provide directions only for public transport, not for driving, to any place in Korea. Anyone crazy enough to try the journey on bicycle or on foot, directions for which Google Maps provides elsewhere, will be similarly stymied. </div>
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The highly regulated Internet comes as a surprise to many people, Koreans included, because South Korea is a strong democracy with a vibrant economy seemingly ready for the digital information age. </div>
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South Koreans were early adopters of Internet games and smartphones. It has world-beating electronics companies like Samsung and LG. But here the Internet is just different. </div>
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The Korean government has its reasons, most of them well-intentioned. The curfew, for example, was put in place to deal with concerns over game addiction among teenagers. </div>
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South Korean security restrictions that were put in place after the Korean War limit Google’s maps, the company says. The export of map data is barred, ostensibly to prevent it from falling into the hands of South Korea’s foe to the north, across the world’s most heavily fortified border. Google and other foreign Internet companies say the rule also prevents them from providing online mapping services, like navigation, that travelers have come to rely on in much of the rest of the world. </div>
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The Korea Communications Standards Commission, a regulatory panel, blocks material on the Web that it deems objectionable. This can include pornography, the production of which is technically illegal in South Korea. </div>
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“It’s ironic, in a country that is widely recognized for its advanced digital infrastructure, that there are so many restrictions on the Internet in Korea,” said Kim Keechang, a law professor at Korea University who is writing a book on Internet regulation in South Korea. </div>
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Foreign Internet companies say the country’s rules prevent them from competing against domestic rivals because they cannot provide the same services they do elsewhere. South Korea is one of the few major markets where Google is not the leading search engine. A <a href="http://www.naver.com/" title="The Web site. ">South Korean rival, Naver,</a> has the most users. </div>
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But domestic criticism of the Korean approach to Internet regulation is growing. Civil liberties advocates successfully challenged the rule requiring users of Internet discussion groups to provide their real names, verified by a national identity registration system. A court last year struck down the measure, which was introduced in 2007 to try to curb online bullying after a rash of suicides. </div>
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Now the government of President Park Geun-hye is moving to ease some of the Internet regulations. </div>
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Ms. Park wants to encourage creativity in the South Korean high-technology industry, which is very good at developing hardware like smartphones and television sets but not as good at exporting software and services. Critics say the different rules that South Korean companies have to play by limit their ability to think in a worldly fashion. </div>
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In September, the government promised to ease the restrictions on online mapping services. The National Geographic Information Institute, part of the Ministry of Land, Infrastructure and Transport, said it would make an official English-language digital map available to Internet companies, beginning this month for companies based in South Korea. The ministry said the policy would help foreign Internet companies and to clear up uncertainties over Korean place names. </div>
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The move comes amid a new flare-up in a longstanding dispute over a group of islets between South Korea and Japan known variously as the Dokdo in Korea, the Takeshima in Japan and the Liancourt Rocks in some other places. (The islands are either in the Sea of Japan or the East Sea, another naming dispute.) </div>
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For Google and other foreign companies, there is a hitch. They will be permitted to use the map as of next year, on a case-by-case basis. Now, Google adapts its English-language maps of South Korea from the government’s Korean-language maps. Google is permitted to provide directions using public transit systems like the Seoul subway, because train and bus routes and schedules are available through public records. </div>
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But Google says other map enhancements, like driving directions, traffic information,and indoor floor plans of airports, require the company to process the data at its servers outside South Korea. This would constitute an export of the map data, which has been forbidden until now. </div>
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Google says the policy change announced by the Ministry of Land does not go far enough. That is because the scale of the new official, English-language map is limited to 1:25,000, which Google says is insufficient to provide details that its Maps users take for granted elsewhere. </div>
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“Maps at the lower resolution don’t have accurate enough information to guide people and cars through intersections, sidewalks, bike lanes, pedestrian overpasses and many points of interest,” the company said in a statement. </div>
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Google maintains that the rules are unfair because domestic Internet companies like Naver are able to provide online navigation and other mapping services, even to users outside the country. That is because Naver’s servers are housed in South Korea. For many foreign visitors, though, Naver’s maps are of limited use: they are only in Korean. </div>
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“We just think any services should be carried out within the framework of the law,” Naver said. “The same laws should apply to all providers of Web map services, domestic or foreign.” </div>
ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-8523665679504672112013-10-14T19:44:00.003-04:002013-10-14T19:44:32.636-04:00Perfecting the Face-Lift, Gangnam Style<a href="http://mobile.businessweek.com/articles/2013-10-10/plastic-surgery-lifts-south-korean-tourism">http://mobile.businessweek.com/articles/2013-10-10/plastic-surgery-lifts-south-korean-tourism</a><br />
<br />
Kylie Vu holds up her iPhone to display a photo of her favorite South Korean actress. “I want a chin like hers,” she tells a beauty consultant at the BK Plastic Surgery clinic in Seoul. Vu, 30, budgeted $10,000 for a chin implant and face-lift and traveled more than 1,600 miles from Vietnam, where she manages five kindergartens.<br />
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The number of tourists visiting South Korea for cosmetic surgery has increased more than fivefold since 2009, to 15,428 last year, according to the country’s health ministry. Like Vu, many make a beeline for the so-called beauty belt—hundreds of clinics clustered around subway stations in Gangnam, the upscale Seoul neighborhood made famous by Korean pop singer Psy, whose Gangnam Style music video has garnered more than 1.78 billion views on <a href="http://mobile.businessweek.com/quote/GOOG">YouTube</a>.<br />
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“I’ve had patients from China and Japan since the late 1990s,” says Kim Byung Gun, whose BK Plastic Surgery employs six surgeons, along with 30 interpreters speaking Japanese, Mandarin, Cantonese, Vietnamese, English, and other languages. “It’s grown more rapidly since, because of the staggering demand for plastic surgery among Koreans.” In a 2011 poll carried out by the Seoul city government, 32 percent of respondents said they’d be willing to go under the knife to improve their looks, up from 21.5 percent in 2009. A total of 649,938 cosmetic procedures were performed in South Korea in 2011, according to the International Society of Aesthetic Plastic Surgery, more than 13 procedures for every 1,000 people—the highest rate of any country in the world. <br />
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South Korea’s medical tourism industry logged revenue of 487 billion won ($453 million) in 2012, according to estimates from the Korea Tourism Organization. That’s triple the amount in 2009. The government promotes the industry abroad and has set a target of adding about 20,000 jobs over the next four years.<br />
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South Korean clinics provide an array of special services for visitors, such as hotel accommodations, airport pickups, and multilingual websites, e-mail, and video consultations. Plastic surgery trips cost an average of $14,000, including air fare and accommodations, according to Lee Joon, marketing director at Seoul TouchUp, a travel agency that books all-inclusive packages.<br />
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Growing interest in Korean pop culture is a major factor drawing medical tourists from Asia, even though surgeries often cost more than they do at home, says Kim of BK Plastic Surgery. Koreans typically request operations to Westernize their appearance; patients from other Asian countries want the features of Korean celebrities. <br />
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Gangnam, the destination for more than 20 percent of all medical tourists to South Korea, opened a visitor center in July to help visitors choose accredited hospitals. To improve safety and safeguard the industry’s reputation, the government has begun cracking down on hospitals that work with unregistered tourism agencies. The state-run Human Resources Development Service of Korea offers a qualification exam for medical tour operators. (Risks of traveling too soon after surgery include pulmonary embolisms and blood clots, according to the American Society of Plastic Surgeons.) <br />
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As she prepared for a makeover modeled on Kim Tae Hee, the South Korean actress who plays the lead in the popular TV drama Love Story in Harvard, Vu was already plotting a return trip to Seoul. <br />
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“South Korea’s plastic surgery is known to be the best in the world,” says the Vietnamese visitor, clutching an Hermès handbag. “I’ll probably be back in Korea in six months to get another face-lift.”ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-65762425355548053542013-04-17T10:01:00.003-04:002013-04-17T10:01:43.422-04:00Beyond Korean style: Shaping a new economic growth formula<a href="http://www.mckinsey.com/insights/asia-pacific/beyond_korean_style?p=2&p=1"><span style="font-size: xx-small;">http://www.mckinsey.com/insights/asia-pacific/beyond_korean_style?p=2&p=1</span></a><br />
<br />
<span id="rightframe_1_IPArticleSource">McKinsey Global Institute</span><br />
<span></span><br />
<span>Download the whole report here:</span><br />
<span><a href="http://www.mckinsey.com/~/media/McKinsey/dotcom/Insights%20and%20pubs/MGI/Research/Productivity%20Competitiveness%20and%20Growth/Beyond%20Korean%20Style/MGI_Beyond_Korean_style_Full_report_April2013.ashx"><span style="font-size: xx-small;">http://www.mckinsey.com/~/media/McKinsey/dotcom/Insights%20and%20pubs/MGI/Research/Productivity%20Competitiveness%20and%20Growth/Beyond%20Korean%20Style/MGI_Beyond_Korean_style_Full_report_April2013.ashx</span></a></span><br />
<span></span><br />
<span>Beginning in the 1960s, South Korea has set economic-development records with a growth formula that focused on heavy-industry and manufactured exports. GDP has tripled in just the past 20 years, and South Korea became the first nation to go from being a recipient of aid from the Organisation for Economic Co-operation and Development to being a member of its donor committee. South Korea is the leading supplier of LCD screens, memory chips, and mobile phones and is the world’s number-five automaker. <br />
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Yet the nation’s GDP growth is increasingly decoupled from the lives of its middle- income citizens. The number of middle-income households—earning 50 to 150 percent of median income—has fallen from 75.4 percent of the population to 67.5 percent since 1990, and more than half of middle-income households are cashflow constrained when the full costs of housing payments are counted. The squeeze contributes to trends that could affect future growth, including a plummeting personal-saving rate and one of the world’s lowest fertility rates. <em>Beyond Korean style: Shaping a new growth formula</em>, a new report from the McKinsey Global Institute (MGI), explores the causes of these economic challenges and makes specific recommendations for combatting them. Among the report’s findings: <br />
<ul class="bullListSep">
<li>South Korea’s largest industrial corporations have continued to grow rapidly, but mostly in new global markets; their domestic employment has fallen by 2 percent annually for 15 years, leaving job creation to small and medium-sized enterprises (SMEs) and Korea’s underdeveloped service sector, where wages are just 55 percent of manufacturing pay. </li>
<li>Spending on housing and education have soared (exhibit). The median price for a home in South Korea is 7.7 times the median annual income—more than twice the US multiple. South Koreans also pay much more to finance their home purchases because low loan-to-value limits often force homebuyers to seek supplemental, high-interest loans. Spending on private education is extremely high as well (around 9 percent of GDP) because South Koreans believe admission to a top university is the only path to success for their children. </li>
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But South Korea can take specific steps to strengthen its middle-income households, increase domestic demand, and build a more balanced economy. Namely: <br />
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<li><em>Reduce housing payments.</em> By switching to mortgages with looser loan-to-value limits, MGI estimates that South Korean homeowners could save $8 billion annually in payments. South Korea can also encourage more investment in rental housing and can consider shared ownership programs. </li>
<li><em>End the education “arms race.”</em> Even though Koreans continue to sacrifice to prepare their children for university, unemployment rates are higher for South Korean college graduates than for graduates of vocational high schools. And when costs are factored in, the net present value of the lifetime earnings of a privately educated college graduate is lower than those for a graduate of vocational high school. To help parents consider alternatives to a university education, MGI suggests higher investment in vocational education and expansion of the Meister school program, in which employers collaborate with schools to create job-relevant curricula. A dual-track system would enable students to continue on to college degrees as they progress in their careers. </li>
<li><em>Build up services and SMEs.</em> South Korean services are dominated by low value-added enterprises, particularly local services (for example, restaurants, real-estate sales, transportation). South Korea can build on the success of sectors that are already globally competitive, such as construction engineering, and help expand sectors such as health care, tourism, and financial services. </li>
<li><em>Create an entrepreneurial SME sector.</em> Most SMEs are very small, and few mid-sized enterprises become large companies. Structural problems are partly to blame, but South Korea also lacks an entrepreneurial tradition and offers limited support for innovative risk-takers. South Korea can work to expand access to capital, increase intellectual-property protections, teach entrepreneurism, and update bankruptcy regulations. These initiatives will take a concerted effort by policy makers, business leaders, and South Korean citizens. But the result could be a new growth formula that complements the current model, reverses the erosion of middle-income households, and builds a sustainable future for all South Koreans. </li>
</ul>
</span>ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-87956474717846658232013-04-01T12:11:00.004-04:002013-04-01T12:14:04.907-04:00How Samsung Became the World's No. 1 Smartphone Maker<a href="http://www.businessweek.com/articles/2013-03-28/how-samsung-became-the-worlds-no-dot-1-smartphone-maker"><span style="font-size: xx-small;">http://www.businessweek.com/articles/2013-03-28/how-samsung-became-the-worlds-no-dot-1-smartphone-maker</span></a><br />
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<span class="inline_image right">By Sam Grobart</span><br />
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I’m in a black <span class="ticker_wrap">Mercedes-Benz (<a class="ticker" data-symbol="DAI:GR" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=DAI:GR">DAI</a>)</span> van with three Samsung Electronics PR people heading toward Yongin, a city about 45 minutes south of Seoul. Yongin is South Korea’s Orlando: a nondescript, fast-growing city known for its tourist attractions, especially Everland Resort, the country’s largest theme park. But the van isn’t going to Everland. We’re headed to a far more profitable theme park: the Samsung Human Resources Development Center, where the theme just happens to be Samsung.<br />
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The complex’s formal name is Changjo Kwan, which translates as Creativity Institute. It’s a massive structure with a traditional Korean roof, set in parklike surroundings. In a breezeway, a map carved in stone tiles divides the earth into two categories: countries where Samsung conducts business, indicated by blue lights; and countries where Samsung will conduct business, indicated by red. The map is mostly blue. In the lobby, an engraving in Korean and English proclaims: “We will devote our human resources and technology to create superior products and services, thereby contributing to a better global society.” Another sign says in English: “Go! Go! Go!”<br />
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More than 50,000 employees pass through Changjo Kwan and its sister facilities in a given year. In sessions that last anywhere from a few days to several months, they are inculcated in all things Samsung: They learn about the three P’s (products, process, and people); they learn about “global management” so that Samsung can expand into new markets; some employees go through the exercise of making kimchi together, to learn about teamwork and Korean culture.<br />
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They will stay in single or shared rooms, depending on seniority, on floors named and themed after artists. The Magritte floor has clouds on the carpet and upside-down table lamps on the ceiling. In a hallway, the recorded voice of a man speaking Korean comes over the loudspeakers. “Those are some remarks the chairman made some years ago,” a Samsung employee explains.<br />
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She’s referring to Lee Kun Hee, the 71-year-old chairman of Samsung Electronics, who declined to be interviewed for this article. Despite making headlines in 2008, when he was convicted of tax evasion, and 2009, when he was pardoned by South Korea’s president, he maintains a low profile.<br />
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Except within Samsung, that is, where he’s omnipresent. It’s not just the slogans over the sound system; Samsung’s internal practices and external strategies—from how TVs are designed to the company’s philosophy of “perpetual crisis”—all spring from the codified teachings of the chairman.<br />
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Since Lee took control of Samsung in 1987, sales have surged to $179 billion last year, making it the world’s largest electronics company by revenue. That makes Samsung Electronics the world’s largest electronics company by revenue. For all its global reach, though, the company remains opaque. We all know the story of Steve Jobs and <span class="ticker_wrap">Apple (<a class="ticker" data-symbol="AAPL" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=AAPL">AAPL</a>)</span>, Akio Morita and <span class="ticker_wrap">Sony (<a class="ticker" data-symbol="SNE" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=SNE">SNE</a>)</span>. But Samsung and Lee Kun Hee? People may bring up the South Korean government’s support of local champions and access to easy capital, but within the company it all goes back to Chairman Lee and the Frankfurt Room.<br />
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It doesn’t look like much: early 1990s vintage décor and a large table with a fake flower centerpiece. But the Frankfurt Room is to Changjo Kwan as the Clementine Chapel is to St. Peter’s Basilica: an extra-special place inside an already special place. Photography is forbidden; people whisper when inside. It’s a meticulous recreation of the drab conference room in the German hotel where, in 1993, Chairman Lee gathered his lieutenants and laid out a plan to transform Samsung, then a second-tier TV manufacturer, into the biggest, most powerful electronics manufacturer on earth. It would require going from a high-volume, low-quality manufacturer to a high-quality one, even if that meant sacrificing sales. It would mean looking past the borders of South Korea and taking on the world.<br />
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Samsung is having a moment. It’s dominant in TVs and sells a lot of washing machines, but it’s smartphones that made Samsung as recognizable a presence around the world as <span class="ticker_wrap">Walt Disney (<a class="ticker" data-symbol="DIS" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=DIS">DIS</a>)</span> and <span class="ticker_wrap">Toyota Motor (<a class="ticker" data-symbol="TM" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=TM">TM</a>)</span>. If Samsung isn’t yet as lustrous a brand as Apple, it’s finding success as the anti-Apple—Galaxy smartphones outsell iPhones. And Samsung is probably the only other company that can throw a product introduction and have people line up around a city block, as they did in New York City on March 14 for the launch of the Galaxy S 4. That never used to happen when Samsung unveiled a refrigerator—although the kimchi-specific models made for the Korean market are really quite impressive.<br />
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Samsung Electronics is the largest part of Samsung, a conglomerate that accounts for 17 percent of South Korea’s gross domestic product. It employs 370,000 people in more than 80 countries, but nowhere can its presence be felt more acutely than in its native country, where it’s so dominant it may as well be a second government.<br />
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A Seoul resident may have been born at the Samsung Medical Center and brought home to an apartment complex built by Samsung’s construction division (which also built the Petronas Twin Towers and the Burj Khalifa). Her crib may have come from overseas, which means it could have been aboard a cargo ship built by Samsung Heavy Industries. When she gets older, she’ll probably see an ad for Samsung Life Insurance that was created by Cheil Worldwide, a Samsung-owned ad agency, while wearing clothes made by Bean Pole, a brand of Samsung’s textile division. When relatives come to visit, they can stay at The Shilla hotel or shop at The Shilla Duty Free, which are also owned by Samsung.<br />
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Conglomerates have been out of favor in most of the industrialized world for decades. What separates Samsung from Gulf + Western, Sunbeam, and other extinct examples is focus and opportunism taken to the extreme. “Samsung is like a militaristic organization,” says Chang Sea Jin, a professor at the National University of Singapore and the author of <em>Sony vs. Samsung</em>. “The CEO decides which direction to move in, and there’s no discussion—they carry out the order.”<br />
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“Samsung’s like clockwork,” says Mark Newman, an analyst at <span class="ticker_wrap">Sanford C. Bernstein (<a class="ticker" data-symbol="AB" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=AB">AB</a>)</span> who worked at Samsung from 2004 to 2010, for a time in its business strategy department. “You have to fall in line. If you don’t, the peer pressure’s unbearable. If you can’t follow a specific directive, you can’t stay at the firm.”<br />
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Consider the disciplined way Samsung Electronics moves into new product categories. Like other Korean conglomerates—LG and Hyundai come to mind—the first step is to start small: make a key component for that industry. Ideally the component will be something that costs a lot of money to manufacture, since costly barriers to entry help limit competition. Microprocessors and memory chips are perfect. “A semiconductor fab costs $2 billion to $3 billion a pop, and you can’t build half a fab,” says Lee Keon Hyok, Samsung’s global head of communications (and no relation to Chairman Lee). “You either have one or you don’t.”<br />
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Once the infrastructure is in place, Samsung begins selling its components to other companies. This gives the company insight into how the industry works. When Samsung decides to expand operations and start competing with the companies it has been supplying, it makes massive investments in plants and technologies, leveraging its foothold into a position that other companies have little chance of matching. Last year, Samsung Electronics devoted $21.5 billion to capital expenditures, more than twice what Apple spent in the same period. “Samsung makes big bets on technologies,” says Newman. “They study the hell out of the problem, and then they bet the farm on it.” <br />
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In 1991, Samsung started making LCD panels it sold to other television brands. In 1994 it started making flash memory for devices such as the iPod and smartphones. Samsung is now the No. 1 maker of LCD televisions and sells more flash memory and RAM chips than any other company in the world. And in 2012 it passed <span class="ticker_wrap">Nokia (<a class="ticker" data-symbol="NOK" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=NOK">NOK</a>)</span> to become the world’s largest mobile-phone manufacturer.<br />
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As Samsung has risen, others have failed, often in spectacular fashion: Motorola was split up and its handset business sold to <span class="ticker_wrap">Google (<a class="ticker" data-symbol="GOOG" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=GOOG">GOOG</a>)</span>. Nokia watched its long-standing No. 1 position erode when it got blindsided by smartphones. The Sony-<span class="ticker_wrap">Ericsson (<a class="ticker" data-symbol="ERIC" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=ERIC">ERIC</a>)</span> partnership dissolved. Palm disappeared into <span class="ticker_wrap">Hewlett-Packard (<a class="ticker" data-symbol="HPQ" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=HPQ">HPQ</a>)</span>. <span class="ticker_wrap">BlackBerry (<a class="ticker" data-symbol="BBRY" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=BBRY">BBRY</a>)</span> continues to be on a 24-hour watch and has had its belt and shoelaces confiscated. When it comes to mobile hardware, today there’s only Apple, Samsung, and a desperate crowd of brands that can’t seem to rise above being called “the rest.”<br />
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Lee’s father, Lee Byung Chull, founded Samsung in 1938. The name means “three stars,” which was the company’s logo for decades. Lee took over as chairman following his father’s death in 1987. (Lee Kun Hee’s son, Lee Jae Yong, is vice chairman and heir apparent.) The company immediately prospered under Lee Kun Hee’s leadership. “Between 1988 and 1993, the company had grown two and a half times,” says Shin Tae Gyun, Samsung’s president of the Human Resources Development Center, “so executives thought things were working.” Lee, however, didn’t just want Samsung to be a successful Korean company. He wanted it to be a world player, something on the level of <span class="ticker_wrap">General Electric (<a class="ticker" data-symbol="GE" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=GE">GE</a>)</span>, <span class="ticker_wrap">Procter & Gamble (<a class="ticker" data-symbol="PG" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=PG">PG</a>)</span>, and <span class="ticker_wrap">IBM (<a class="ticker" data-symbol="IBM" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=IBM">IBM</a>)</span>. He even set a deadline: the year 2000. “2000 was not that far away,” says Shin. “At that growth rate, could we become a world-class company in time? The answer was no.”<br />
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To see how his company was faring internationally, Lee embarked on a world tour in 1993. His findings were not encouraging: A visit in February to a Southern California electronics store revealed Sony and <span class="ticker_wrap">Panasonic (<a class="ticker" data-symbol="PC" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=PC">PC</a>)</span> TVs in the front window and Samsung TVs gathering dust on a low shelf in the back. Lee was not happy. <br />
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By June, he’d made it to Germany and was staying at the Falkenstein Grand Kempinski Hotel in Frankfurt. He summoned all of Samsung’s executives—who numbered in the hundreds—to meet him there. “He did this at the drop of a hat, and they all gathered,” says communications chief Lee. On June 7 the chairman delivered a speech that lasted three days (they adjourned in the evenings). The most famous quote to emerge from the address was, “Change everything but your wife and children,” which has “Ask not what your country can do for you” levels of recognition at Samsung.<br />
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The event became known, formally, as the Frankfurt Declaration of 1993, with all the United Nations import the name suggests. The content of the Frankfurt Declaration is called New Management, its principles distilled into a 200-page book that’s distributed to all Samsung employees. A stand-alone glossary was later published to define the terms laid out in the first book. Workers who weren’t fully literate were given a cartoon version. Lee went around the globe, evangelizing his gospel to all corners of the Samsung empire. “He conducted a lot of lectures,” recalls Shin. “It comes to 350 hours. We transcribed those events; it took 8,500 pages.”<br />
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And so, just across from New Management Hall at the HRDC in Yongin, is the hallowed Frankfurt Room. A tour guide proudly notes that everything in the room—including the chairs, drab pink tablecloth, and a painting of Venice—are the originals from the room in the Kempinski when Lee delivered his declaration. Samsung had all the furnishings shipped back to Korea and recreated the room precisely.<br />
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New Management is centered around a number of central slogans: “Fostering the individual” and “change begins with me” are commonly heard phrases. Perhaps most important, it deals in quality control, or “quality management,” as it’s called within the company. All of that is vividly on display at another Samsung holy site, the Gumi complex, located about 150 miles south of Seoul. Gumi, Samsung’s flagship smartphone manufacturing facility, is where Samsung built its first mobile phone: the SH-100, a Brobdingnagian handset that rivaled Gordon Gekko’s Motorola DynaTac 8000 in tonnage.<br />
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The first thing you notice about Gumi is the K-pop. Korean pop music seems to be everywhere outside, usually coming from outdoor speakers disguised as rocks. The music has an easy, mid-tempo style, as if you were listening to a mellow Swing Out Sister track in 1988. The music, a Samsung spokeswoman explains, is selected by a team of psychologists to help reduce stress among employees. <br />
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There are more than 10,000 workers at Gumi. The vast majority are women in their early 20s. Like most twentysomethings, they move in groups, often with their heads down as they look at their phones. Workers wear pink jackets, some wear blue—which color is a matter of personal preference. Many of the unmarried employees also live at Gumi in dorms that have dining rooms, fitness centers, libraries, and coffee bars. Coffee’s big in Korea; the coffee shop on the Gumi campus has its own roaster. <br />
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Inside, Gumi is surprisingly warm and humid. The factory is part of a global network of Samsung facilities that, in 2012, produced a total of 400 million phones, or 12 phones every second. Workers at Gumi are not on an assembly line; production is done on a cellular basis, with each employee standing within a three-sided workbench that has all the necessary tools and supplies an arm’s reach away. The employee is then responsible for the overall assembly of the phone. Computer stations located throughout the assembly facility can call up real-time manufacturing data from any Samsung facility in the world.<br />
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Banks of quality-testing equipment fill one room. Small plastic propellers spin above the air vents of many of the machines. “It was an employee’s idea,” a tour guide explains. “It was difficult to determine if a machine was functioning from far away. The employee suggested that propellers would be a good indication if the machine was on.” Samsung employees are given incentives to come up with ideas like these. A cost savings is calculated, and a portion of that is returned to the employee as a bonus.<br />
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Such striving for efficiency and excellence wasn’t always a priority. In 1995, Chairman Lee was dismayed to learn that cell phones he gave as New Year’s gifts were found to be inoperable. He directed underlings to assemble a pile of 150,000 devices in a field outside the Gumi factory. More than 2,000 staff members gathered around the pile. Then it was set on fire. When the flames died down, bulldozers razed whatever was remaining. “If you continue to make poor-quality products like these,” Lee Keon Hyok recalls the chairman saying, “I’ll come back and do the same thing.”<br />
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The lesson stuck. In May 2012, three weeks before the new Galaxy S III was to be shipped, a Samsung customer told the company that the back covers for the smartphone looked cheaper than the demo models shown to clients earlier. “He was right,” says DJ Lee, the marketing chief of Samsung Mobile. “The grain wasn’t as fine on the later models.” There were 100,000 covers in the warehouse with the inferior design, as well as shipments of the assembled devices waiting at airports. This time, there would be no bonfire—all 100,000 covers, as well as those on the units at the airports, were scrapped and replaced.<br />
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Besides the Great Phone Incineration of 1995, two other signal acts helped propel Samsung’s rise in smartphones. The first was in 2009, when it bet big on Android, Google’s operating system for mobile. Samsung’s first Android device was called the Galaxy. “We were not successful with our first Android phone,” says DJ Lee. “The app store was limited.” Android was still in its infancy, greatly outclassed by the iPhone’s operating system, iOS. But Android was open-source, which meant that it was available free of charge to any manufacturer that wanted it.<br />
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In 2010, Samsung introduced the Galaxy S line, exemplifying its second momentous decision: using bigger screens. The Galaxy S’s screen was significantly larger than the original Galaxy and other Android models. “We settled on a 4-inch screen, which people thought was too big,” says DJ Lee. “There was a lot of argument about that.” But the bigger screens proved to be a major selling point; they grew larger still on the Galaxy S II and S III. Now, Samsung smartphones come in sizes ranging from 2.8 inches to 5 inches (to say nothing of the company’s “phablets,” which go up to 5.5). “Nobody had any idea what the right screen size was, so Samsung made all of them and saw which one worked,” says Benedict Evans, a researcher at Enders Analysis.<br />
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Producing a range of similar devices in various sizes to see which sells best is one of those high-cost undertakings most companies shy away from. But Samsung’s ability to produce display, memory, processors, and other high-tech parts gives it a flexibility competitors can’t touch. “There was this orthodoxy 10 years ago that vertical integration was passé,” says Tero Kuittinen, an analyst at Alekstra, a mobile-phone consultancy. “Then it turned out that the only two companies that took it seriously [Samsung and Apple] took over the whole handset industry.”<br />
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Apple’s approach is fewer models, each of them exquisitely designed. Samsung’s is try everything, and fast. “When we released the Galaxy S III, our research showed that, for some people in some markets, the handset was too big,” says DJ Lee. “So we were able to create the same phone with a 4-inch screen, and we called it the Galaxy S III mini.” Getting the smaller device into production took about four to six months, says DJ Lee. “We watch the market, and we immediately respond,” he says.<br />
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The new Galaxy S 4 is coming out only nine months after the GS3. “Samsung has taken differentiation to a new art,” says Michael Gartenberg, an analyst at <span class="ticker_wrap">Gartner (<a class="ticker" data-symbol="IT" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=IT">IT</a>)</span>. “If I want something in between an iPad and an iPad mini, I can’t get that from Apple.”<br />
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Apple’s vertical integration has one thing Samsung’s doesn’t, though: control over the software. Only Apple smartphones and tablets run iOS, and one of the hallmarks of the iPhone and iPad is how smoothly the software and hardware work together. That’s fostered an industry of app makers, and the company gets a cut of every app sold.<br />
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Samsung is making efforts to strengthen its position by opening a software development center in Silicon Valley. It may never have the kind of operating system control that Apple has. Samsung does, however, use its production depth and flexibility in ways that are arguably as powerful. It makes the processors, memory chips, and cameras that are in not only their own smartphones but also in many others—including the microprocessor in the iPhone 5. The express policy of the company is that the components business is walled off from the “set” business (its own finished products, like the Galaxy S 4), and that the one side doesn’t know what the other is doing. But few people who watch the company think Samsung keeps itself in the dark. New technologies take time to develop, particularly if that technology is needed in large quantities. “Having that early-stage insight into the supply chain has been one of the key factors to give them an edge,” says Neil Mawston of Strategy Analytics. “They can see three years ahead.”<br />
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This is an extremely sore subject with some of Samsung’s customers. Apple sued Samsung in the U.S. and elsewhere for patent infringement, from the basic shape of the phone to how a screen bounces back when users scroll to the bottom; Samsung denies the accusations, and has countersued. The legal war shows no sign of ending. Apple won a round in August, when a federal jury awarded Apple $1 billion in damages. That case is now on appeal, and the judge recently reduced the award by about half.<br />
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However the many court cases play out, Samsung wouldn’t have to break the law to use its position as a supplier to its advantage. If a manufacturing customer merely approaches Samsung with a request for a new kind of processor, that information is valuable. “Having a road map of, say, Apple and knowing what competitors are doing is pretty useful,” says Bernstein’s Newman. “It’s not copying, and it’s not illegal. You just know that in 2013, Apple’s going to need a quad-core processor.”<br />
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For the Galaxy S 4 unveiling in mid-March, Samsung rented Radio City Music Hall on a Thursday night. TV trucks were parked outside, and lines of people snaked around the block. The lobby was packed. As a point of comparison, a Motorola event in New York six months earlier was held in a party space that had sold its naming rights to Haier, the Chinese appliance company. Nokia’s event the same day was nearby at a low-profile, generic event facility.<br />
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At Radio City, Broadway actor Will Chase mastered the ceremonies in between surreal sketches of actors portraying average consumers using the Galaxy S 4’s features in various situations. Elaborate sets evoking a school, Paris, and Brazil emerged from the stage floor. An orchestra rose up on hydraulic lifts. A little boy tap-danced. The whole show seemed inexplicable—save as a metaphor for Samsung’s try-everything mobile business. “Samsung makes every kind of handset in every market in every size at every price,” says Evans. “They’re not stopping to think. They’re just making more phones.”<br />
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The Galaxy S 4 doesn’t come out until late April. It’s fast, has a big, bright screen, and will probably be another huge hit for Samsung, as will the S 4 mini that will go on sale soon after. Yet when discussing Samsung’s immediate future, Lee Keon Hyok betrays zero triumphalism. He’s seen this before and knows that it’s counter to the principles of New Management to derive pleasure from the success of today. “In 2010 it was a banner year for the whole group,” he says, sitting in his 35th-floor office in Seoul. “The chairman’s response? ‘Our major businesses can disappear in 10 years.’ ”<br />
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Perhaps Samsung will grow so huge it invites new government scrutiny in Korea. Maybe iPhones 6, 7, and 8 will prove so beautiful and compelling, not even the chairman will have an answer. A likelier scenario is that another company, probably from China, will do to Samsung what it has done to its competitors. “The Chinese look like Samsung did five years ago,” says Horace Dediu, an independent mobile analyst. He identifies Huawei and ZTE as particular threats; other analysts bring up <span class="ticker_wrap">Lenovo (<a class="ticker" data-symbol="LNVGY" href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=LNVGY">LNVGY</a>)</span>. “Samsung makes less profit per smartphone than Apple,” Dediu continues. <br />
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“The Chinese make even less. If the smartphone is going to become a commodity, how does Samsung play in that game?”<br />
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Lee Keon Hyok predicts that smartphones will indeed become commoditized, just as PCs did in the 1990s. “But you have to remember, we make a lot of parts,” he says. “The shape may change, but phones are still going to require AMOLED displays, memory, and processors. We are well prepared to meet those changes.” AMOLED refers to active-matrix organic light-emitting diodes. It’s the state of the art and possibly the only display technology that has its own K-pop song: <em>Amoled</em>, a catchy 2009 number by Son Dam-bi and After School.<br />
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When the mobile business ceases to be profitable, Samsung will have to force its way into some other industry that requires a lot of upfront capital and expertise in mass-manufacturing. The company announced in late 2011 that it would spend $20 billion by 2020 to develop proficiencies in medical devices, solar panels, LED lighting, biotech, and batteries for electric cars. And if Samsung batteries or MRI machines don’t take over the market, maybe the chairman will set a huge pile of them on fire. “The chairman is saying all the time, ‘This is perpetual crisis,’ ” says mobile marketing chief DJ Lee. “We are in danger. We are in jeopardy.” <br />
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ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-48928702881366525792013-03-30T13:32:00.001-04:002013-03-30T13:32:13.040-04:00Pyongyang Blusters; the U.S. Worries About Quieter Risks<a href="http://www.nytimes.com/2013/03/30/world/asia/in-pyongyang-bluster-fakery-and-real-risks.html"><span style="font-size: xx-small;">http://www.nytimes.com/2013/03/30/world/asia/in-pyongyang-bluster-fakery-and-real-risks.html</span></a><br />
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By <span itemid="http://topics.nytimes.com/top/reference/timestopics/people/c/choe_sanghun/index.html" itemprop="author creator" itemscope="" itemtype="http://schema.org/Person"><span itemprop="name">CHOE SANG-HUN</span></span>and <span itemid="http://topics.nytimes.com/top/reference/timestopics/people/s/david_e_sanger/index.html" itemprop="author creator" itemscope="" itemtype="http://schema.org/Person"><span itemprop="name">DAVID E. SANGER</span></span><br />
<nyt_text></nyt_text><br />
<nyt_text>This week, <a class="meta-loc" href="http://topics.nytimes.com/top/news/international/countriesandterritories/northkorea/index.html?inline=nyt-geo" title="More news and information about North Korea.">North Korea</a>’s young leader, Kim Jung-un, ordered his underlings to prepare for a missile attack on the United States. He appeared at a command center in front of a wall map with the bold, unlikely title, “Plans to Attack the Mainland U.S.” Earlier in the month, his generals boasted of developing a “Korean-style” nuclear warhead that could be fitted atop a long-range missile. </nyt_text><br />
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Kim Jong-un, the North Korean leader, met with military leaders in Pyongyang on Friday. Some of the photos of military preparedness released by Korea appear to be digitally manipulated. </div>
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But the missile systems that figure in Mr. Kim’s blitz of threats and orders do not yet have the range to approach American shores. There is no evidence his <a class="meta-classifier" href="http://topics.nytimes.com/top/news/science/topics/atomic_weapons/index.html?inline=nyt-classifier" title="More articles about nuclear weapons.">nuclear weapons</a> can be shrunk to fit atop a missile. And a prominent photograph showing Mr. Kim’s military making a Normandy-style beach landing appears to have been manufactured, raising questions about whether his forces could possibly repeat the feat his grandfather pulled off in 1950, ordering a ground attack to open the Korean War. </div>
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On top of all that, most countries on the verge of a major military assault do not broadcast their battle plans to the world. </div>
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“You would expect such a military order to be issued in secret,” said Kim Min-seok, spokesman of the South Korean Defense Ministry. “We believe that by revealing it to the media and publicizing it to the world, North Korea is playing psychology.” </div>
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In fact, it is the abilities that Mr. Kim is not showing off that have the Obama administration most worried. The cyberattacks on South Korea’s banking system and television broadcasters two weeks ago were surprisingly successful, as was the torpedo attack three years ago this week on the <a class="meta-classifier" href="http://topics.nytimes.com/top/reference/timestopics/subjects/c/cheonan_ship/index.html?inline=nyt-classifier" title="More articles about the Cheonan.">Cheonan</a>, a naval corvette, that killed 46 South Korean sailors. The North has never acknowledged involvement in either — though the South believes it was responsible for both and so do American experts. </div>
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“We’re convinced this is about Kim solidifying his place with his own people and his own military, who still don’t know him,” one senior administration official said Friday. He added, “We’re worried about what he’s going to do next, but we’re not worried about what he seems to be threatening to do next.” </div>
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The cyberattacks and torpedo attack have something in common: Unlike the missile attacks and beach landings that Mr. Kim seems to be suggesting are imminent, they are hard to trace to North Korea, at least immediately. As a result, they are hard to retaliate against, and in fact the South never struck back militarily for the sinking of the Cheonan, even after a commission of inquiry, with experts from outside South Korea, concluded it was the work of a submarine-launched torpedo. </div>
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To North Korea experts in Washington and Seoul, there is something familiar in the country’s threats to “keep the White House in the cross hairs of our long-range missiles.” Such threat of armed brinkmanship — the catchphrase in the 1990s was that Seoul would become a “sea of fire,” a term recently revived by North Korea’s news agencies — has in the past drawn its adversaries to the bargaining table with economic concessions. But at the same time, the tensions with the outside world provide the government with opportunities to elevate its leader’s status among his people — which might be more important to a young, untested leader than it was to his father and grandfather. </div>
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According to the view that North Korea’s propaganda machine pounds into its citizens’ minds, the North is a tiny nation besieged by hostile outside forces, one that survived despite decades of sanctions and can finally stand up to both its longtime Chinese ally and American enemy — all thanks to the strong “military-first” leadership of the Kim family and the country’s nuclear arsenal. </div>
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In such a setting, Mr. Kim’s trip to a border island on a wooden boat — it almost seemed designed to create a “Washington crossing the Delaware” motif — is proof of his “daring and pluck,” as the country’s main party newspaper, Rodong, explained. Rodong also declared about <a class="meta-classifier" href="http://topics.nytimes.com/top/news/international/countriesandterritories/northkorea/nuclear_program/index.html?inline=nyt-classifier" title="Recent and archival news about Iran's nuclear program.">North Korea’s nuclear weapons</a>: “Let the American imperialists and their followers know! We are not a pushover like Iraq or Libya.” The first, famously, had no nuclear weapons; the second gave up its nascent nuclear program in late 2003, a move North Korea describes as Col. Muammar el-Qaddafi’s greatest mistake. </div>
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In the propaganda world that the three generations of the Kim dynasty has created, Mr. Kim is “a great iron-willed general admired by all of his people, including real generals who have actually served in the military,” said Lee Sung-yoon, North Korea specialist at the Fletcher School of Law and Diplomacy at Tufts University. “For the Kim III, fantasy is reality.” </div>
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Keeping the fantasy up has required a lot of work in the past month, with many visits to military units on both of the country’s coasts, and a lot of conferences at midnight with generals. </div>
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Yet in each of these scenes, North Korea’s propagandists sometimes made Mr. Kim look as much a clumsy actor as a new leader of one of the world’s most belligerent governments. </div>
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For one, North Korean state-run media on March 12 released a photo showing Mr. Kim arriving at an island within the gun range of South Korean marines and quoted him as threatening to “cut the windpipes of the enemies.” But it strained credibility that he traveled to a region he called a powder keg on a small unarmed wooden boat, as shown in the photo. </div>
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On Tuesday, North Korea released a photo showing Mr. Kim watching hovercrafts storm a snow-covered beach in eastern North Korea. But it did not take long for journalists and analysts to conclude that the picture was clumsily doctored to add more amphibious landing vehicles and make the drill look far more imposing than it really was. </div>
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Then on Friday, photos released by the North’s state media, which also showed signs of digital manipulation, featured Mr. Kim huddling with his top generals during a midnight meeting to approve “plans to strike the mainland U.S.” A military chart behind them showed a series of lines shooting out of North Korea and hitting major cities in the United States, including those on the East Coast. Even if the North Koreans had such missiles — most analysts doubt it does — would they really intend to launch them at the United States in what would be a suicidal action for the Pyongyang government?</div>
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“We’re all trying to put him on the couch,” said Jonathan D. Pollack, a North Korea expert at the Brookings Institution. “A year ago the U.S. and the Chinese saw at least the possibility that you could do business with him. But he has steadily reverted to form,” adopting the approach of his father and grandfather in using the perception of an external threat to solidify support at home. </div>
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On Saturday those threats were South Korea and “the Americans and their puppets,” a statement from the North said. The two Koreas “were back to a state of war,” it said, and the North’s foes “should know that everything is different under our peerless general and dear Marshal <a class="meta-per" href="http://topics.nytimes.com/top/reference/timestopics/people/k/kim_jongun/index.html?inline=nyt-per" title="More articles about Kim Jong-un.">Kim Jong-un</a>.” While many fear that Mr. Kim’s rhetoric is building up toward some action, Mr. Pollack held out the hope that the threats could abate as United States and South Korean military exercises, which infuriate the North, wind up at the end of April. </div>
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ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-36404523507571073842013-02-11T12:57:00.003-05:002013-02-11T12:57:40.182-05:00Les Miserables ROK Air Force Parody Les Militaribles / 공군 레미제라블 '레밀리터리블'<iframe width="560" height="315" src="http://www.youtube.com/embed/lZunEARBb6I" frameborder="0" allowfullscreen></iframe>
ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-50075967957901601262013-02-04T10:34:00.001-05:002013-02-04T10:34:08.577-05:00South Korea's new goverment eyeing tech venture boom<a href="http://www.zdnet.com/south-korea-new-govt-eyeing-tech-venture-boom-7000010731/"><span style="font-size: xx-small;">http://www.zdnet.com/south-korea-new-govt-eyeing-tech-venture-boom-7000010731/</span></a><br />
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<span>Summary:</span> Administration of president-elect Park Geun-hye is planning to foster tech startups and help them secure funds through angel capitalists, in a bid to revitalize economy and create more jobs.<br />
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Headed by president-elect Park Geun-hye, the country's new government will strive to create a business environment where small-sized companies can secure funds through angel capitalists, said a member of the presidential transition team who declined to be named, in a report by <a href="http://koreatimes.co.kr/www/news/nation/2013/02/116_129934.html" target="_blank">Yonhap News Agency on Sunday</a>. The administration came into office on December 19, 2012.<br />
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"We have to encourage technology venture firms to create jobs for young people. In addition, they are good for economic growth because expansion boosted by big companies is in the doldrums," the anonymous member said. <br />
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The initiative, tentatively named "Venture Again", will be announced in the near future. The transition team also expects the new policy to help achieve Park's promise of a 70-percent employment rate in South Korea.<br />
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According to the report, this is not the first time South Korea has tried to encourage the growth of startups to stimulate economic growth. In the late 2000s, previous president Kim Dae-jung and his administration had pursued a similar strategy.<br />
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However, it seemed to work to an extent but was responsible for IT bubbles which burst in 2010 and greatly impacted the economy. Many fraudulent people also received government subsidies based on insubstantial technologies after allegedly bribing corrupted bureaucrats.<br />
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To prevent such incidents, Park's administration plans to help young entrepreneurs receive funds from the private sector such as angel capitalists, the unnamed member said. Venture firms with a technology edge will also be listed on the Korea Stock Exchange or receive loans from financial institutes.<br />
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Park recently said South Korea needed to emulate U.S. Silicon Valley, where angel capitalists proactively competed to invest in startups with high commercial potential without any infusion of state money.ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-11518891866309694422013-02-04T07:26:00.001-05:002013-02-04T07:27:00.809-05:00PSY | Wonderful Pistachios Get Crackin' Super Bowl 2013 Ad<div class="separator" style="clear: both; text-align: center;">
<iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/rE6iiiDdTNY?feature=player_embedded' frameborder='0'></iframe></div>
<br />ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-35249577947491544272013-01-09T09:32:00.000-05:002013-01-09T09:33:57.378-05:00The rise of South Korea and lessons for Canada<a href="http://www.thestar.com/opinion/editorialopinion/article/1311799--the-rise-of-south-korea-and-lessons-for-canada"><span style="font-size: xx-small;">http://www.thestar.com/opinion/editorialopinion/article/1311799--the-rise-of-south-korea-and-lessons-for-canada</span></a><br />
By Thomas Klassen<br />
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A Korean wave is sweeping the world. The secretary-general of the United Nations is Korean, the head of the World Bank is a Korean-American. “Gangnam Style,” a song by the Korean rapper Psy, has become <a href="http://www.youtube.com/watch?v=9bZkp7q19f0" target="_blank">the most watched video on YouTube</a>.<br />
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In the past decade Korean companies, Samsung, LG, Hyundai and others, have become household names across the globe. The epic battle between Apple and Samsung for dominance in mobile devices is testament that Korean companies stand second to none. In Ontario, Samsung and the <a href="http://www.kepco.co.kr/eng/" target="_blank">Korea Electric Power Corp.</a> are spending more than $3 billion to build wind and solar energy plants.<br />
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The success of Korea is particularly astounding since until the 1960s the nation was dirt poor, having suffered a brutal period of Japanese colonization followed by the devastation of the Korean War. Until five years ago, Canada’s GDP was greater than Korea’s. Now Korea outpaces Canada and the gap grows each year.<br />
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What are the lessons for Canada from Korea’s rapid rise on the world stage? <br />
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First, that post-secondary education is the main driver of success in the global marketplace. Knowledge, both theoretical and applied, is essential in designing and manufacturing cars, supertankers, mobile phones, and making movies and videos. That many Koreans are willing and able to learn English and study overseas, allows them to access the world markets, be it in science, diplomacy or business.<br />
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The achievements of Korea are the direct result of a skilled workforce, as the country lacks natural resources and has no sources of energy. Canada, blessed with a land mass 100 times that of South Korea, and abundant natural resources, fails to prioritize education. That Canada has no national post-secondary education department or strategy is incomprehensible to all international observers.<br />
If there was ever an argument for constitutional reform in Canada, it is surely to grant the federal government a role in ensuring that the nation’s universities, colleges and private vocational schools operate in a strategic manner in a knowledge economy.<br />
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The second lesson for Canada is that government strategy and support are essential for industries and individuals to compete, and succeed, internationally. A decade ago the Korean government made it a priority to strengthen the entertainment and cultural sector, after concluding that the nation could no longer compete in some manufacturing industries with lower-wage economies.<br />
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This decision marshalled government departments, from education to foreign affairs to finance, to increase national capacity in this sector of the economy. The results are only now becoming apparent, as shown by the sensation of “Gangnam Style.” In its successful bid for the for the 2018 Winter Olympics, government, business and other groups worked together for more two decades, and through two failed bids.<br />
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The last lesson that Canadians can learn from Korea is that success depends on reacting quickly to developments. Twenty years ago, when China opened its doors to the outside, Korean firms were the first to take advantage from a billion more customers.<br />
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Korean manufacturers responded swiftly by sending their staff to China to supervise the newly opened plants. Korean students embraced learning Mandarin, in addition to English. In contrast, Japanese and other firms were hesitant, waiting to see if China would truly adopt a market economy. Not surprisingly, the firms moving first and fast obtained the best market share.<br />
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In the past two years, Korea has signed and implemented free trade agreements with the U.S. and the 27 countries of the European Union. Canada, on the other hand, in the past 10 years, managed to implemented free trade agreements with Colombia, Iceland, Jordan, Liechtenstein, Norway, Peru and Switzerland. These countries represent so little of Canada’s annual trade that the total dollar amount is a rounding error.<br />
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Canada, after more than a decade of negotiations, is still uncertain if it wishes to sign a trade agreement with the European Union, India, Korea or any major economy. Watching from the sidelines is not a good strategy in the fast-moving moving global economy.<br />
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As Canadians become more and more enticed to spend money on Korean goods and services, they might well consider that if a dirt poor country can become rich in 50 years, could not a wealthy country become poor in the next 50?<br />
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<i><b>Thomas Klassen</b> is an associate professor of political science at York University. He has lived, and taught at universities, in Korea and written extensively about the country.</i>ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-10543970024962492052013-01-05T19:40:00.001-05:002013-01-05T19:45:58.347-05:00South Korea Prepares the Young for a Rapidly Aging Population<a href="http://www.npr.org/2013/01/04/168615553/south-korea-prepares-the-young-for-a-rapidly-aging-population"><span style="font-size: xx-small;">http://www.npr.org/2013/01/04/168615553/south-korea-prepares-the-young-for-a-rapidly-aging-population</span></a><br />
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At a clean and sunny community center in Seoul, the South Korean capital, senior citizens make clay models of their own faces in an arts class. Some of the faces are vivid and lifelike. Others are expressionless and indistinct. The project is intended to help the seniors remember what they look like.</div>
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This is the Gangseo District Center for Dementia. Since 2006, Seoul has opened a dementia center in each of the city's 25 urban districts.</div>
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It's one of the novel approaches that South Korea has developed to cope with an epidemic of dementia. Recent data suggest that South Korea is now the fastest-aging country on Earth.</div>
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By some estimates, nearly 40 percent of Koreans will be 65 years old or older by midcentury. In a sense, the country is suffering from its rapid development, which has been accompanied by soaring life expectancy and plummeting birth rates.</div>
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The Gangseo center provides sports and music classes, with the aim of giving dementia patients a sense of participation and accomplishment, as well as some physical and cognitive exercise.</div>
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The centers also help to ease the burden and isolation of family members like Jeon Om-ryul. Her husband was diagnosed with dementia, and she has been bringing him to the center every week for the past two years.</div>
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"This is my biggest worry," she says. "For 12 years, I raised my granddaughter, until my husband got sick. Now I take care of him. I've never had the energy to think of myself. Whenever I think of what will happen to me, all I can do is cry. I wonder who will take care of me. I fear that only the government can."</div>
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In 2011, Korea passed a dementia management law, establishing the centers and mandating that citizens older than 65 be checked for dementia symptoms.</div>
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Social worker Kim Dong-hun says the most fulfilling part of his job at the center is helping the patients to imbue their activities with purpose and meaning. But he says the social stigma associated with dementia makes it hard to reach out to patients.</div>
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"We publicize our programs intensively, but one of the biggest challenges we face is that many people still have not changed their attitude toward dementia," Kim says. "Even if you go to their house to find them, they don't want to come out."</div>
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Sung Mi-ra, secretary-general of the Seoul Metropolitan Center for Dementia, which coordinates the 25 community-level centers, estimates that South Korea currently has about 530,000 dementia patients, out of a total population of 50 million. This number has risen 27 percent in the past four years. She estimates there will be 1 million patients by 2025.</div>
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She says dementia costs South Korea the equivalent of $8 billion a year in hospital fees and lost income, and that figure will double every decade. Sung says South Koreans need to start seeing dementia as a disease.</div>
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<a href="http://www.blogger.com/" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"></a>"In past, whenever someone got dementia, it was treated as a natural occurrence," Sung says. " 'If you get old, you lose your mind,' went a common saying. Nobody treated this condition because people believed that's just the way it is."</div>
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Compared with other developed countries, very few elderly South Koreans live in nursing homes. Confucian attitudes about filial piety are still prevalent here, and while they are less common now, many families still have three or more generations living in one home.</div>
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Sung says South Korea's approach to aging assumes that family members — not the government — will provide most of the care to the elderly.</div>
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<a href="http://www.blogger.com/" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"></a><a href="http://www.blogger.com/" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"></a>"Institutionalizing a demented parent is seen as unfilial," she explains. "For this reason, dementia patients should be living at home with their families. So what is important is that the community creates an environment where this is possible. This is why centers like ours are being established around the country."</div>
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Another hallmark of South Korea's approach is to train young people to empathize with the elderly, and prepare for their own senescence.</div>
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At a gleaming glass and steel community center called the Seongnam Senior Complex in Seoul's southern suburbs, students giggle as their classmate Kim Dong-hyun plays the role of a bedridden senior who is hoisted from his bed into a chair using a winch and sling.</div>
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The students are wearing sandbags to weigh down their limbs, back braces that force them to stoop, and glasses that impair their vision. Kim says he's still mulling over the implications of his training.</div>
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"I am worried about the aging of our society," he says. "We need to get ready. I'm not sure what I personally can do to get ready. ... Have a lot of children to take care of me in my old age, I guess."</div>
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In another class, the students put on 3-D glasses to mimic the effects of dementia. The class instructor says the training inspires some students to reconsider how they treat their elders. Others, though, say it simply makes them dread the thought of growing old.</div>
ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-34731640690750634972013-01-04T18:04:00.003-05:002013-01-04T18:04:43.920-05:00South Korea’s new president: Plenty on her plate<a href="http://www.economist.com/news/asia/21569073-park-geun-hye-prepares-address-some-her-fathers-legacy-plenty-her-plate"><span style="font-size: xx-small;">http://www.economist.com/news/asia/21569073-park-geun-hye-prepares-address-some-her-fathers-legacy-plenty-her-plate</span></a><br />
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Jan 5th 2013 | <em>SEOUL </em>| from the print edition
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PARK GEUN-HYE’S campaign advertising described her as a “prepared female
president”. Having narrowly defeated the Democratic United Party (DUP)
candidate, Moon Jae-in, on December 19th, two-thirds of her slogan will be
realised with her inauguration on February 25th. The “prepared” part, however,
is less clear.<br />
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South Korean presidents-elect appoint transition teams to help smooth their
way into office and many of their members then take up posts in the new
government. With her appointments, Ms Park seems to be trying to bridge the
political divide. Her transitional team, consisting of nine subcommittees, is
headed by Kim Yong-joon, a former head of South Korea’s Constitutional
Court.<br />
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Mr Kim is a conservative like Ms Park, but is not seen as hardline by the 48%
who voted for Mr Moon. As a young judge in 1963, he even ruled against the
detention of an army chief-of-staff who had opposed Ms Park’s father, the
dictator Park Chung-hee. Ms Park has also taken care to give prominent roles to
natives of Jeolla province, such as Han Kwang-ok, head of the subcommittee on
national unity. Jeolla suffered under successive military regimes in the past,
and always votes for the DUP rather than Ms Park’s Saenuri Party.</div>
<div class="related-items" sizcache="20" sizset="87">
</div>
The rallying cry of the election was “economic democratisation”, a fluffy
term that has two main strands, both of which Ms Park seems to be sticking to.
The first is to counter the vast (and increasingly unpopular) power of families
that run the <em class="Italic">chaebol</em>, South Korea’s huge conglomerates. <br />
<br />
Ms
Park’s party is historically pro-<em class="Italic">chaebol. </em>Her father set
up the system that enabled them to flourish with governmental support. But she
has promised a tougher line, notably on the system of cross-holdings that permit
control of a conglomerate with only a small amount of capital.<br />
<br />
At a meeting on December 26th with the Federation of Korean Industries, a <em class="Italic">chaebol</em> lobby group, Ms Park emphasised jobs over profit
maximisation. She has also pledged to be tougher on crooked behaviour. In the
past decade three chairmen of the largest five <em class="Italic">chaebol
</em>have received presidential pardons following convictions for offences such
as fraud and tax evasion. If she sticks to her word, this will stop.<br />
<br />
The second strand is the expansion of the welfare state. Ms Park promises to
provide free child care for under-fives, and to subsidise social security
contributions and university-tuition fees for the poor. <br />
<br />
On January 1st the
national assembly approved 2.4 trillion won ($2.3 billion) of extra welfare
spending to pay for all this, as part of the “Park Geun-hye budget”. Old
conservatives like the outgoing finance minister, Bahk Jae-wan, have long
grumbled about the populism of such measures.<br />
<strong></strong><br />
<strong>A dangerous neighbourhood</strong><br />
Although Ms Park has undoubtedly shifted her party on domestic issues,
foreign policy is unlikely to change much from that of outgoing president, Lee
Myung-bak. Ms Park speaks some Chinese and will want to overcome the strains
caused by China’s insistence on sending North Korean refugees back home rather
than to South Korea, as well as the incursion of Chinese fishing boats into
South Korean waters. But relations with America are strong and she will not want
to risk them merely to please China. On December 24th, the Obama administration
offered South Korea four advanced spy drones.<br />
<br />
America’s expansion of its missile-defence programme in Asia raises Chinese
concerns about containment. Some analysts say this will make Beijing see South
Korea’s alliance with America as part of a wider anti-China strategy, rather
than one merely directed at North Korea. There could be problems ahead,
regardless of the fluency of Ms Park’s Chinese.<br />
<br />
American officials hope Ms Park can repair damaged ties with their other main
regional partner, Japan. South Koreans remain angry about colonial-era sex
slavery, and the ownership dispute over the Dokdo islands (known as Takeshima in
Japan), visited by President Lee in August. Ms Park’s father once served in the
Japanese imperial army that occupied northeast China, making it politically
impossible for her to show too much kindness to Japan.<br />
<br />
Shinzo Abe, Japan’s new premier, sent envoys to meet Ms Park on January 4th
in an attempt to ease the tension, but the South Korean press has been working
itself into a frenzy over Mr Abe’s strident nationalism. His big majority gives
him leeway to be diplomatic, but any move to rescind a 1995 apology for wartime
suffering his country caused would be disastrous for the bilateral
relationship.<br />
<br />
Then there is North Korea. Ms Park has based her approach on reciprocity,
pitched halfway between the “sunshine” policy of former presidents Kim Dae-jung
and Roh Moo-hyun, and the frostiness of Mr Lee. She says she will start with
small economic projects and humanitarian aid, and engage further if the North’s
leader, Kim Jong Un, chooses diplomacy with the South. She calls it
“trustpolitik”.<br />
<br />
On January 1st Mr Kim gave the first new year’s speech by a North Korean
leader for 19 years, calling for an end to confrontation. But, although the
style may mark a change, his demand for the implementation of old sunshine-era
agreements is likely to leave Ms Park unmoved. Experience shows that one of the
few things North Korea can be trusted to do is to continue developing nuclear
weapons. Mr Kim may well test a device soon. Ms Park will need to be
prepared.</div>
ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-5528706128776146782012-12-20T17:10:00.000-05:002012-12-20T17:10:06.060-05:00Business as usual for South Korea's chaebol under Park<a href="http://www.reuters.com/article/2012/12/20/us-korea-election-chaebol-idUSBRE8BJ07C20121220"><span style="font-size: xx-small;">http://www.reuters.com/article/2012/12/20/us-korea-election-chaebol-idUSBRE8BJ07C20121220</span></a><br />
<br />
By Ju-min Park<br />
Reuters, Seoul<br />
<br />
A Park will be back in South Korea's <span class="mandelbrot_refrag"><a class="mandelbrot_refrag" href="http://www.reuters.com/video/reuters-tv?videoId=238534668&videoChannel=118066&lc=int_mb_1001">presidential</a></span> mansion come February, and the
big businesses, or chaebol, that dominate the country's <span class="mandelbrot_refrag"><a class="mandelbrot_refrag" href="http://www.reuters.com/finance/economy?lc=int_mb_1001">economy</a></span> will be breathing a sigh of relief
that her left-wing challenger did not win Wednesday's presidential
vote.<span id="midArticle_1"></span>
<br />
<br />
Victory for Park Geun-hye, the 60-year old daughter of South Korea's former
military ruler, in the <span class="mandelbrot_refrag"><a class="mandelbrot_refrag" href="http://www.reuters.com/video/reuters-tv?videoId=237536565&videoChannel=118066&lc=int_mb_1001">election</a></span> means the top chaebol - five of
whom control assets worth 57 percent of gross domestic product in the world's
14th largest economy - can get back to the business of making <span class="mandelbrot_refrag"><a class="mandelbrot_refrag" href="http://www.reuters.com/video/reuters-tv?videoId=238669148&videoChannel=118066&lc=int_mb_1001">money</a></span>.<br />
<span id="midArticle_2"></span>
<br />
Park's left-wing challenger had threatened to end the complex web of
shareholdings that enable families to control sprawling conglomerates like
Samsung Group and Hyundai Motor Co..<br />
<span id="midArticle_3"></span>
<br />
The <span class="mandelbrot_refrag"><a class="mandelbrot_refrag" href="http://www.reuters.com/video/reuters-tv?videoId=237536565&videoChannel=118066&lc=int_mb_1001">election</a></span> came at a sensitive time for
Samsung and Hyundai as both are in the process of passing power to a third
generation of their family owners, a process that left-wing candidate Moon
Jae-in could have complicated with an attack on their shareholdings, had he
won.<br />
<span id="midArticle_4"></span>
<br />
"She doesn't have any plans to alter the structures of the chaebol ownership
and their concentration of economic power," said Kim Sang-jo, an economist at
Hansung University and executive director of a group urging reform of South
Korea's economy.<br />
<span id="midArticle_5"></span>
<br />
Seoul shares rallied on Thursday after Park's win adding 0.32 percentage
points, in part on relief that Moon lost.<br />
<span id="midArticle_6"></span>
<br />
"The election results have eased policy uncertainty, and raised hopes of
economic stimulus," said Cho Young-hyun, an analyst at Hana Daetoo
Securities.<br />
<span id="midArticle_7"></span>
<br />
CHAEBOL AND PARK<br />
<span id="midArticle_8"></span>
<br />
Park's father, Park Chung-hee, is the person responsible for building the
chaebol during the 1960s and 1970s.<br />
<span id="midArticle_9"></span>
<br />
With a mix of threats and inducements for the top chaebol bosses, the
founders of Samsung and Hyundai emerged from the ruins of the 1950-53 Korean War
to help build a modern industrial state that has been dubbed "The Miracle on the
Han".<br />
<span id="midArticle_10"></span>
<br />
At one stage, Park the father threatened to imprison Lee Byung-chull, the
founder of Samsung.<br />
<span id="midArticle_11"></span>
<br />
At another, in early 1970s, Park yelled at Hyundai founder Chung Ju-yung
telling him he was incapable of building a shipyard and would cut all ties with
Hyundai, according to Chung's memoirs.<br />
<span id="midArticle_12"></span>
<br />
"Chairman Chung, we must do this!" Park, after a long silence and a
cigarette, said of the plan to build a shipyard, according to the
memoir.<br />
<span id="midArticle_13"></span>
<br />
Chung said "Yes Sir" and the shipyard was built and became the world's
largest shipbuilder, Hyundai Heavy Industries Co Ltd. .<br />
<span id="midArticle_14"></span>
<br />
Park Geun-hye is not likely to be as irascible as her father and her policies
remain sketchy.<br />
<span id="midArticle_15"></span>
<br />
She has promised to share wealth more widely but said no new <span class="mandelbrot_refrag"><a class="mandelbrot_refrag" href="http://www.reuters.com/video/reuters-tv?videoId=238165734&videoChannel=118066&lc=int_mb_1001">taxes</a></span> on individuals or companies, and no
attack on the chaebol.<br />
<span id="midArticle_0"></span>
<br />
"It is not my aim to dismantle or bash the chaebol," Park said in
July.<br />
<span id="midArticle_1"></span>
<br />
"The main aim is to fix negative parts such as abuse of economic power and to
save the positive part the chaebol have such as job creation."<br />
<span id="midArticle_2"></span>
<br />
Yet, Park can't be too aggressive when high-income conservative earners make
up a large part of her support and her party isn't willing to abandon its
pro-business stances, analysts said.<br />
<span id="midArticle_3"></span>
<br />
Tax revenues in <a data-ls-seen="1" href="http://www.reuters.com/places/south-korea" title="Full coverage of South Korea">South
Korea</a> are just 19.3 percent of gross domestic product (GDP), according to
investment bank Nomura, compared with more than 30 percent of GDP in most
advanced economies, effectively limiting Park's room to increase spending if she
keeps her pledge not to raise <span class="mandelbrot_refrag"><a class="mandelbrot_refrag" href="http://www.reuters.com/video/reuters-tv?videoId=238165734&videoChannel=118066&lc=int_mb_1001">taxes</a></span>.<br />
<span id="midArticle_4"></span>
<br />
Park, who came into politics at the time of the 1997-98 Asian financial
crisis to "save" her country, also looks unlikely to tinker with South Korea's
export-driven model. If anything, she looks set to be risk-averse.<br />
<span id="midArticle_5"></span>
<br />
"We believe that, in light of the painful memory of the 1997 currency crisis,
the top priority of policymakers, regardless of political ideology, is to reduce
Korea's external vulnerability," Nomura said in a report issued on election
day.<br />
<span id="midArticle_6"></span>
<br />
The chaebol themselves appeared to be happy with Wednesday's outcome and the
prospect of being left alone.<br />
<span id="midArticle_7"></span>
<br />
"We want (the president-elect) to undertake lots of economic policies that
help investments and job creation so that our companies can focus on reviving
the economy," chaebol lobby group the Federation of Korean Industries said in a
congratulatory message.<br />
<br />ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-51605024216534382512012-12-19T14:32:00.000-05:002012-12-19T14:32:07.141-05:00Picture: First Female President Elected in South Korea<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEggo3Qdu0-kUNUcdno1trDJdN5lUQuCW0l8YMMfoCuHkwHhFiTX39cf6WpKYUgjfg_HLsMx5DHp9sYy-M_Eks9BYndnp1S7hX2RZn5HIyglpM-dqULWw1ul4Kec2O3zXV7hVdVRiw/s1600/gty_south_korea_female_president_nt_121219_wg.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEggo3Qdu0-kUNUcdno1trDJdN5lUQuCW0l8YMMfoCuHkwHhFiTX39cf6WpKYUgjfg_HLsMx5DHp9sYy-M_Eks9BYndnp1S7hX2RZn5HIyglpM-dqULWw1ul4Kec2O3zXV7hVdVRiw/s400/gty_south_korea_female_president_nt_121219_wg.jpg" width="400" /></a></div>
<div class="separator" style="clear: both; text-align: center;">
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<div class="separator" style="clear: both; text-align: center;">
<a href="http://abcnews.go.com/International/female-president-elected-south-korea/story?id=18015449"><span style="font-size: xx-small;">http://abcnews.go.com/International/female-president-elected-south-korea/story?id=18015449</span></a></div>
<div class="separator" style="clear: both; text-align: center;">
</div>
ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-2141876313851556592012-11-29T09:34:00.000-05:002012-11-29T09:34:11.482-05:00As South Korea Tackles Drinking Culture, Samsung Sets Guidelines<a href="http://blogs.wsj.com/korearealtime/2012/11/29/as-south-korea-tackles-drinking-culture-samsung-sets-guidelines/"><span style="font-size: xx-small;">http://blogs.wsj.com/korearealtime/2012/11/29/as-south-korea-tackles-drinking-culture-samsung-sets-guidelines/</span></a><br />
<br />
<em>By Jeyup S Kwaak</em><br />
<br />
Like many office workers in South Korea, Cho Sung-joon went out drinking with
his colleagues most weeks during his five-year stint at <a href="http://online.wsj.com/public/quotes/main.html?type=djn&symbol=005930.SE">Samsung
Electronics</a> Co. <span data-ticker-name="005930.SE" data-widget="dj.ticker"></span><br />
<br />
<div class="mceTemp" style="text-align: left;">
<dl class="wp-caption alignleft caption-alignleft " style="width: 359px;">
<dt class="wp-caption-dt"><img alt="" class="size-full wp-image-5" height="239" src="http://s.wsj.net/public/resources/images/OB-VM446_jinro_E_20121128032150.jpg" width="359" /></dt>
<dd class="wp-caption-dd wp-cite-dd" style="text-align: right;">Bloomberg
News</dd>
<dd class="wp-caption-dd" style="text-align: left;">Bottles of soju, a rice-based
liquor.</dd></dl>
</div>
<br />
After kicking off the night guzzling soju, a rice-based liquor, over grilled
pork or raw fish, he and his co-workers would move on to a pub or karaoke
lounge, occasionally past midnight.<br />
<br />
“We did drink a lot to blow off steam,” said Mr. Cho.<br />
<br />
It’s a hierarchical bonding experience known as <em>hoesik</em> — literally
“staff dinner.” Deeply ingrained in South Korean business culture,
<em>hoesik</em> usually involves free-flowing alcohol, often forced upon
lower-ranked staff who are expected to serve and entertain their superiors. Not
playing the rules is a shortcut to soured relations and poor performance
reviews.<br />
<br />
Current and former Samsung Electronics staff say Samsung’s <em>hoesik</em>
weren’t particularly excessive, but in September the parent company, Samsung
Group, implemented a strict code of conduct for staff dinners. The rules banned
rituals like <em>beolju</em>, or forcing drinks on others, and <em>sabalju</em>
— the mixing of several different beverages to make a potent punch.<br />
<br />
<div class="insetCol3wide">
<div class="insetContent embedType-videoThumb imageFormat-arbitrary">
<div class="insetTree">
<div class="insetType-video" id="video_inset_A5DBBAF7-0266-4E9F-879D-9517A1780308">
A Samsung Group employee of nine years who asked not to be named said the
company had implemented a rule known as “1-1-9″, which restricts <em>hoesik</em>
to one sitting, one type of alcohol and a cut-off point of 9 p.m in order to
prevent excessive drinking.</div>
</div>
</div>
</div>
<br />
Spokespeople for Samsung Group and its subsidiaries declined to comment for
this article.<br />
<br />
Samsung’s move to manage its own drinking culture comes as South Korea has
more broadly made some steps this year towards tackling excessive alcohol
consumption and drink-induced violence.<br />
<br />
South Koreans are by far the heaviest drinkers in Asia and the biggest
consumers of spirits in the world, according to the World Health Organization.
Drink is valued as a social glue that has long been a part of the collective
identity. With minimal laws against public intoxication, drunks dot the streets
of the largest cities after dark. Convenience stores sell cheap hard liquor
around the clock.<br />
<br />
Alcohol-induced violence has also long been tolerated as a side-effect of the
nation’s love of the bottle. Arrests have been rare and judges have lowered
sentences for criminals if they were found to have acted under the influence of
alcohol.<br />
<br />
In 2008, a seven-year old girl was raped by a man in suburban Seoul.
Prosecutors sought life imprisonment, but the court ruled that the man was too
drunk to know what he was doing and sentenced him to 12 years in prison.<br />
<br />
A campaign this summer led by one of the nation’s major newspapers in
coordination with the Seoul Metropolitan Police Agency has sought to change
attitudes about drunken violence. More than 500 repeat offenders were
arrested.<br />
<br />
“Individual incidents involving alcohol weren’t considered newsworthy,” said
Lee In-yul, assistant editor at the Chosun Ilbo newspaper, which ran a
high-profile series on alcohol-related violence, or jupok. “We didn’t see that
some of them were part of a bigger picture.”<br />
<br />
<div class="mceTemp" style="text-align: left;">
<dl class="wp-caption alignright caption-alignright " style="width: 262px;">
<dt class="wp-caption-dt"><img alt="" class="size-full wp-image-5" height="394" src="http://s.wsj.net/public/resources/images/OB-VM445_bombsh_DV_20121128031252.jpg" width="262" /></dt>
<dd class="wp-caption-dd wp-cite-dd" style="text-align: right;">Reuters</dd>
<dd class="wp-caption-dd" style="text-align: left;">A mixing glass for “bombshot”
cocktails of soju and beer, common at company drinking parties. The lines show
recommended ratios of soju and beer and the likely levels of
intoxication.</dd></dl>
</div>
<br />
Away from the extremes, companies are finding that attitudes towards drinking
are changing among younger staff. Many keep their hoesik attendance to a
minimum, puzzling their superiors.<br />
<br />
For previous generations, jobs at large conglomerates represented a dream
destination — you made every effort to fit in, including accepting the drinking
culture. Some job hunters still detail their drinking ability on their
resumes.<br />
<br />
But as conglomerates seek to increase employee loyalty in an increasingly
mobile labor market, some are acknowledging that <em>hoesik</em> culture can be
a turn off for some talented employees or potential new hires.<br />
<br />
Mr. Cho left Samsung in 2011 to study for a Masters of Business
Administration in New York, although he says the drinking culture wasn’t a
factor in his decision.<br />
<br />
Meanwhile, fresh recruits at Samsung said that they were surprised by the
mild initiations and subsequent get-togethers this year.<br />
<br />
“Maybe on one or two instances, we were asked to make a toast,” said a new
hire who asked not to be named, “but that was it. No one was pressured to do
anything.”<br />
<br />
“The (company) policy is enforced so well that the general mood is it’s gone
too far,” said a 20-something analyst who joined Samsung’s securities arm before
this year’s campaign.<br />
<br />
The trick for companies may be to find the sweet spot of team-building
through social drinking, while avoiding the excesses that <em>hoesik </em>are
sometimes known for. For society in general, the challenge remains much larger.ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-76489708903169602882012-10-15T08:08:00.005-04:002012-10-15T08:08:54.019-04:00Presidential politics in South Korea: Bashing the Chaebol<a href="http://www.economist.com/node/21564597">http://www.economist.com/node/21564597</a><br />
<br />
SINCE the days of Park Chung-hee’s often brutal dictatorship (he seized power in 1961 and was assassinated in 1979), South Korea has transformed itself as a democratic nation. Its politics, enlivened by occasional fisticuffs in the National Assembly, are among the most vibrant in Asia. The bid by the late strongman’s daughter, Park Geun-hye, to become the country’s first woman president is no throwback to the past. She faces two strong (male) challengers in the election on December 19th, including one, Moon Jae-in, whom her father’s regime imprisoned. The two men may eventually unite. But at this stage, the outcome is impossible to predict.<br />
<br />
For all the candidates’ differences, a common theme has emerged in the campaign. All three have criticised what they see as the unfair nature of the South Korean economy. They focus on the family-controlled conglomerates, or <em class="Italic">chaebol</em>, which rose to prominence under the state-led finance and cronyism of the Park Chung-hee era. Though greatly reformed since, the <em class="Italic">chaebol </em>still dominate the economy.<br />
<div class="related-items">
<div class="last">
</div>
</div>
Bashing the <em class="Italic">chaebol</em> is not new in South Korea, but this time the mood appears to be hardening. Ordinary folk grumble at the scores of pardons issued to convicted <em class="Italic">chaebol </em>executives under Lee Myung-bak, the outgoing president (himself a former executive in the Hyundai group of companies). Much as South Koreans are proud of having Samsung Electronics, part of the biggest <em class="Italic">chaebol</em>, advertise on Manhattan’s Times Square and act as sponsors of Chelsea Football Club and the Olympics, they worry about the groups’ clout at home.<br />
<br />
Recent data show <em class="Italic">chaebol </em>engaged in more than two-thirds of 76 business categories in South Korea. New fields range from pizzas to handbags to furs. In the past decade the number of companies linked to the ten main <em class="Italic">chaebol </em>has almost doubled, to nearly 600. Between January and June, the operating profits of the ten accounted for more than 70% of the profits of all the companies listed on the Korea Exchange. Exports lead the way, and this success has helped transform South Korea. Yet some also blame it for increasing inequality at a time when the population is ageing and economic momentum may be ebbing.<br />
<br />
And so the presidential campaign is revolving around the term “economic democratisation”. It sounds woolly, but is used earnestly by all three candidates. The most surprising advocate is Ms Park. She has swung the ruling Saenuri Party away from the firmly pro-business Mr Lee. Members of her party have now drafted legislation that would stiffen sentences for convicted <em class="Italic">chaebol </em>owners and their families, and restrict their business activities and investments. Other pro-<em class="Italic">chaebol </em>diehards in her party continue to dismiss all this as empty populism.<br />
<br />
Ms Park’s two opponents, Mr Moon of the Democratic United Party and Ahn Cheol-soo, a software entrepreneur and political independent, both claim to be out to protect small businesses from the <em class="Italic">chaebol</em>. Mr Moon describes South Korea as a “jungle economy” in which the conglomerates enjoy “unfair privileges”. He does not intend to break them up, but wants to strengthen antitrust powers and to stop them from muscling into new territory where they jeopardise small businesses, such as bakeries.<br />
<br />
Mr Ahn, who founded South Korea’s biggest antivirus software firm, accuses the <em class="Italic">chaebol </em>of snaffling up innovative small businesses which then stagnate inside the conglomerates. His campaign was recently joined by Jang Ha-sung, dean of one of the country’s leading business schools. Mr Jang is a crusader for better corporate governance at the <em class="Italic">chaebol</em>. Back in 2001 he helped win one of the first ever class-action lawsuits, against Samsung Electronics.<br />
<br />
The <em class="Italic">chaebol </em>are keeping their heads down, hoping that the hubbub will die away. Their defenders note that however much people rail against the conglomerates, most want their children to work at one of them when they grow up. Defenders also say <em class="Italic">chaebol </em>are so central to South Korea that to attack them would be to attack the country’s economy.<br />
<br />
In fact, weaker <em class="Italic">chaebol</em> could be just what the economy needs. According to the OECD, other sectors, such as services, are highly inefficient and starved of investment in research and development. That is because the country’s development strategy has focused on manufacturing, siphoning capital, talent and other resources from services.<br />
<br />
There is a danger in complacency. The pampered life of a unionised “labour aristocracy” which works for the <em class="Italic">chaebol</em>, compared with poor pay for those in the rest of the economy, feeds a sense of injustice. Incestuous business practices by the <em class="Italic">chaebol</em>’s rich owners add to the concerns. This month, the Fair Trade Commission slapped a 4 billion won ($3.7m) fine on three companies tied to Shinsegae, a big retailer linked to the Lee clan of Samsung, for helping pizza and bakery businesses owned by the chairwoman’s daughter.<br />
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Perhaps the strongest indication that times may be changing involves Kim Seung-youn, chairman of the Hanwha group. He was once convicted for beating up bar workers with an iron rod, after they had been involved in a scuffle with his son. Mr Lee then promptly pardoned him. Convicted again this year, this time for embezzlement, Mr Kim was jailed in August. He is a rare example of a convicted <em class="Italic">chaebol </em>chairman who spends time behind bars. Everyone is waiting to see whether Mr Lee pardons him before stepping down.ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-72104627078493228672012-09-18T11:02:00.004-04:002012-09-18T11:02:43.916-04:00Why are Asians, Especially South Korean Golfers Dominating The LPGA? <a href="http://www.ibtimes.com/sportsnet/golf/why-asians-especially-south-koreans-dominating-lpga_1495.htm"><span style="font-size: xx-small;">http://www.ibtimes.com/sportsnet/golf/why-asians-especially-south-koreans-dominating-lpga_1495.htm</span></a><br />
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<em><span class="art_postby">Posted by </span>Contributor: </em><a href="http://www.ibtimes.com/sportsnet/helyn-edwards/bio/"><em>Helyn Edwards</em></a> | <br />
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<em class="art_picdisc"></em>Jiya Shin, ranked No. 10 in the world, captured her second career major shooting 71 and 73 in a 36-hole final Sunday at the 2012 Women's British Open at the Royal Liverpool Golf Club with a record-breaking 9-shot victory. Shin's victory at the Open meant that for the first time in the Ladies Professional Golf Association's (LPGA) history, all four major titles in one season are held by Asian-born players, 3 by South Koreans.<br />
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Shin joined Sun Young Yoo who captured the Kraft Nabisco Championship, Na Yeon Choi who won the U.S. Women's Open, and Shanshan Feng from mainland China who won the LPGA Championship. The rest of the leaderboard included Inbee Park as the runner-up and American Paula Creamer at 3rd, joined by two other Americans in the top ten, Stacy Lewis and Katie Fucher. The weather as usual in British Opens was the major issue putting a dampener on the players, especially Karrie Webb, the 72-hole leader.<br />
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The sweep by Asian players of the majors this year comes 14 years after Se Ri Pak of South Korea became a national hero by capturing two straight LPGA majors: the U.S. Women's Open and the LPGA Championship in 1998. 12 of the players on the LPGA's top 20 money list are Asians, including #1 Park ($1,419,940) of S. Korea.<br />
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Surely the United States Golf Association (USGA) and other Federations are trying to discover and duplicate the South Korean Golf Assoc. Although making strides, none have had the same dominance, with only 4 Americans in the top money list. As good as reporting is on all levels, if there was one thing or something tangible it would have been cloned and there would be parity among the nations.<br />
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One intangible that is helping is the Asian culture. South Korean television signs on every morning with the national anthem, accompanied by images to instill national pride, like the military, Pak and other successful athletes. Also children are in school, then an after-school program in education or in a sports activity until it's time to go to bed everyday, unlike Western culture with its freer, more rounded emphasis. Most Asian children are expected to help their family and their country succeed, and golf is the new path to success even to the exclusion of education.<br />
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Besides more opportunity, another advantage is a more open sponsorship where even low ranked pros are assisted with their bills for travel and training in contrast to the USA. Ask American Meg Mallon winner of the 2004 US Open who had no sponsors. Won-Seok Choi, a manager for Hi-Mart, Korea's Best Buy, sponsors several players on the LPGA Tour and dozens more in Korea. "We like to support many Korean women golfers because they have a chance to become a big player, like Se Ri Pak...Asian people have very strong families, and support is the most important thing."<br />
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At the U.S. Women's Open this weekend, 5 Korean players were still on the putting green as darkness fell. Shin remarked that, "We work hard...I think so many Asia players are playing at the moment on the LPGA Tour, so it makes a lot of chance to win." In tennis, long-time coaches believe that the more numbers exposed to the sport early on, especially to those athletes who have a hunger for the sport and penchant for success, will lead to more great champions. Unless the USGA invests more in First Tee and the USTA in NJTL or similar grass roots programs and minor levels of play, particularly in the larger segment of the population, then the South Koreans and other Asians, who have done so already, will continue to excel.</div>
ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-69874503190417256462012-09-16T08:22:00.001-04:002012-09-16T08:22:46.499-04:00PSY - GANGNAM STYLE (강남스타일)<iframe width="560" height="315" src="http://www.youtube.com/embed/9bZkp7q19f0" frameborder="0" allowfullscreen></iframe>
ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0tag:blogger.com,1999:blog-35053360.post-9943470137445191652012-07-20T07:27:00.006-04:002012-07-20T07:27:45.876-04:00Between Giants: South Korea and the U.S.-China Rivalry<a href="http://www.theatlantic.com/international/archive/2012/07/between-giants-south-korea-and-the-us-china-rivalry/260060/"><span style="font-size: xx-small;">http://www.theatlantic.com/international/archive/2012/07/between-giants-south-korea-and-the-us-china-rivalry/260060/</span></a><br />
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By <span class="authors"><span class="author">Jennifer Lind</span></span><br />
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<i>An American ally and a Chinese economic partner, South Korea is trying to hedge between two great powers as they compete for influence.</i></div>
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<img alt="SK nationalists.jpg" class="mt-image-center" height="300" src="http://cdn.theatlantic.com/static/mt/assets/international/SK%20nationalists.jpg" style="display: block; margin: 0px auto 20px; text-align: center;" width="615" /><div class="caption">
South Korean conservatives protest the North Korean shelling of Yeonpyeong island in late 2010. (AP)</div>
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After a decade of preoccupation with the Middle East, the United States is turning its attention toward Asia. As Washington refocuses on managing a rising China, in part by strengthening its ties with a network of Asian countries, it's discovering that at least one of its principal allies in the region may not be as fully on board as hoped. While the United States was toppling dictators and chasing terrorists, its South Korean ally has grown accustomed to a powerful China, and appears ambivalent about its role in America's plans for Asia. That's not to say that South Korea is about to evict the tens of thousands of American troops who still help deter North Korean aggression. But nor is the country apparently eager to participate in what many South Koreans see as a U.S. effort to contain China, whose rise has so far benefited their country in many ways. South Korean views are after all shaped by history: not only by the Japanese occupation, World War Two, and Korean War, but by hundreds of years of living as a small country surrounded by giants.<br />
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Recent cooperation between Japan and South Korea, the United States' two key regional allies, suggested promise for a nascent coalition. In June, all three held joint military exercises and Seoul and Tokyo negotiated an accord to facilitate intelligence sharing on North Korea's nuclear and ballistic missile programs. This agreement, called the General Security of Military Information Agreement (GSOMIA), <a href="http://www.stimson.org/spotlight/history-intrudes-on-korea-japan-security-cooperation/">would enhance</a> America's ability to work with its two allies and represented, as political scientist Jeffrey Hornung <a href="http://www.japantimes.co.jp/text/eo20120618a2.html#.UARgLnB1Gc8">wrote</a> in the <i>Japan Times</i>, a "practical, forward-looking effort to strengthen relations between two vibrant democracies facing shared security challenges." Or it would have, at least, if it had ever been signed.<br />
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When South Korean President Lee Myung-bak's government announced the accord with Japan, politicians and civic groups protested. The agreement had been negotiated too quickly and secretly, they decried, demanding that it come before the National Assembly. In the heat of South Korea's election-year politics, politicians railed against security cooperation with Japan and lambasted Lee's government for selling out their country to Tokyo." The idea of offering our military intelligence to the Japanese Self-Defense Forces is utterly unreasonable," declared Democratic United Party spokesperson Kim Hyun in a statement, demanding an apology from President Lee. Two members of Lee's administration resigned, and opposition politicians have submitted a no-confidence vote calling for the prime minister's resignation. Lee's government shelved the accord.<br />
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<a href="http://www.nytimes.com/2012/07/08/opinion/sunday/a-lost-deal-for-south-korea-and-japan.html">Commentators largely blame the fracas</a> on the lingering Japanese-South Korean tensions over historical and territorial disputes. Many Koreans resent Japan for not clearly acknowledging the atrocities it committed during its occupation of the Korean peninsula in the first half of the 20th century. Japanese leaders have at times issued apologies, but politicians and intellectuals on Japan's right still routinely deny well-established historical facts about the country's past human rights violations And Japan and South Korea both claim the same string of tiny islands -- known as Tokdo to Koreans, Takeshima to Japanese, and trouble to everyone else -- which have become a nationalist minefield for the two countries to traverse.<br />
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Still, there's something more behind the unraveling of the GSOMIA accord -- South Korean ambivalence about the country's role in the unfolding U.S.-China drama. Several defense and foreign policy analysts in Seoul told me, when I visited recently, that many of their countrymen shied away from GSOMIA because they saw it as part of a U.S.-led security architecture positioned against China. They added that many South Koreans are dismayed that, as they perceive it, the U.S. increasingly sees China as a military threat. A professor at the Korea National Defense University named Lee Byeong-Gu told me, "In particular, signing the GSOMIA agreement is worrying to Koreans in light of the recent U.S. 'pivot' or 'rebalancing' toward Asia, which many people fear represents an increased containment effort toward China. Some South Koreans are calling for their government to sign an intelligence-sharing agreement with Beijing as well as with Tokyo. South Korean legislator Shim Yoon-joe <a href="http://www.koreatimes.co.kr/www/news/nation/2012/07/116_115054.html">commented that signing such a pact with both Japan and China is important</a> in order "to wipe out the allegation that the Korea-Japan military pact is a stepping stone to trilateral cooperation to check China." <br />
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South Korean analysts also emphasized to me that China is their country's top trading partner. As Aidan Foster-Carter <a href="http://www.atimes.com/atimes/Korea/NG17Dg01.html"> put it,</a> "South Korea can hardly afford to be seen as ganging up on the country whose growth largely drives its own." This year marks the tenth anniversary of the normalization of relations between South Korea and China. One researcher at a think tank in Seoul remarked to me that his institute has planned conferences and other events to commemorate the anniversary, and that South Korea's many other foreign policy institutes are all doing the same. At a time when the Americans appear to be orchestrating a coalition to balance against China, South Koreans are celebrating with it a milestone in productive and friendly relations.<br />
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Yet South Koreans are as wary of accommodating China as they are of containing it. Seoul resents Beijing's support for the North Korean regime. If North Koreans continue to kill South Koreans (as they did in 2010 in the attacks against the Cheonan frigate and Yongpyeong Island), Seoul may grow less tolerant of Beijing's sheltering of Pyongyang. Or increased Chinese belligerence in the South China Sea and East China Sea disputes may lead Seoul to decide that it needs allies to protect it from the behemoth in its backyard.<br />
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It's possible that Chinese policies could one day lead South Korea to edge closer to the U.S. and Japan, but that day has not yet come, and China may never even emerge as a security threat that requires the sort of balancing coalition that the U.S. seems to envision. As long as this ambiguity continues -- or as long as Washington tolerates its ally's coziness with Beijing -- South Korea's strategic position will likely push it strongly toward hedging. As such, Seoul will resist policies, like the agreement with Japan, that appear to situate it clearly on the side of one great power or another.ProfAHKhttp://www.blogger.com/profile/11147665078399640236noreply@blogger.com0