[Opinion] The Nation`s Representative Industry Should Be Nurtured

While the outer world is rushing into openness, liberty, transparency and competition, the two halves of Korean Peninsular are absorbed in closeness, self-centeredness and short-sighted profits.

The present world economy is busy forming two great orders. One is the emergence of the World Trade Organization (WTO) New Round, and the other is the soar of Chinese economy. The WTO New Round will more deepen and accelerate the width and the depth of globalization, liberalization, openness and competition. A characteristic of the New Round is to lower economic barriers among nations. While the Uruguay Round centered on superstructure trades, the New Round includes such invisible trades as capital, information and communication technology, intellectual property, legislation, education and patent.

According to a forecast made by Korea Institute for International Economic Policy (KIEP), the emergence of the New Round will cause the gross domestic product (GDP) of Korea to grow by 2.6~2.9 percent—especially, if an average rate of custom tariff on industrial products decreases to 7.5 percent, then exportation will have an advantage and anti-dumping restrictions will be eased to some extent.

But, on the other hand, damages to agriculture, the marine industry and the service industry will not be small by any means. The opening of markets to agricultural products including rice, the sharp reduction of agricultural subsidies, the phased abolition of subsides for agricultural product export and the reduction of marine industry subsidies can be fatal to the agricultural and the marine industries. It can be a hard war of agriculture. It is inevitable to open markets widely to such service industries as communication, legislation, education, energy, transportation, movie industry, marine transportation, construction, banking and medical industry, in which the nation is still vulnerable. The same is true in the case of environment. There is, of course, still a room for further negotiations since the subsequent negotiations will begin from next month, the offer lists prepared by fields will be settled in three years, and the agreement at the Doha Round will be effective starting from 2006. But the basic structure is unchangeable.

Secondly, the soar of Chinese economy. According to the estimation released by U.S. Central Intelligence Agency (CIA), China`s GDP, which was 387.8 billion dollars in 1990 and 1,790 billion dollars in 2000, will reach up to 12 trillion dollars in 2015. Japan`s GDP, which was 2,970.1 billion dollars in 1990 and 4,739 billion dollars in 2000, will stay at 5 trillion dollars in 2015. If such is the case, then China`s GDP will be slightly less than the U.S.` 14 trillion dollars but will be twice as much as that of Japan and nearly equal to the total of the European Union (EU). Besides, 74 percent of 143 billion dollar investment to the developing countries in Asia made by the World capital rushed into China as of year 2000, and such a trend will continue to be accelerated.

Then, as Japan led the 1980`s and the United States the 1990`s, so China will lead the first decade of 2000`s. In other words, China will become the moving force of the world. Japan`s industrial competitiveness was superior in the world during the 1980`s, and its accumulated capital made it possible to purchase lands, buildings, companies, hotels, stocks and securities in the United States and enjoyed `Buy America`. Then during the 1990`s the United States regained outflowed dollars through information technology industry, the stock and dollar value increase policy and patent policy, and thus achieved an economic growth and the increase of employment. In addition to this, the age of America was made possible by controlling international finance and enjoying `Buy Japan`. There was a power behind such a scene that was able to control the international finance which was 20~30 times larger than the GDP and actual trades of each individual country. But after 10 years later, the power is diminishing.

In this situation, China made an appearance armed with a huge domestic market and human resources and is establishing a vital economy nearly equal to the United States by employing foreign capital including that of overseas Chinese.

These two huge world-orders of economy will bring to us a chance as well as a suffering, and our survival is dependent upon how to accommodate ourselves to these new orders. Above all, politicians, legal professionals, educators, business owners and workers should manage to establish the spirit of Korean capitalism correctly. And upon such a basis, we should run into the world and China, being armed with a new high-tech industry superior in competitiveness and suitable to the ever-changing structure of the world industry.

It is questionable whether there will be a room for us in 2000`s, the age of China, for, unlike the Japan of the 80`s and the United States of the 90`s, who were far ahead of us, China is in rivalry with us. China may possibly outrun us in the fields of our major export items such as steel, automobile, semiconductor, electronics if we hesitate or commit ourselves only to fighting.