Exports to China Expect Special Procurement Boom Due To Olympics

As Beijing of China was selected as the host of 2008 Olympics, Korea is forecasted to have a special procurement boom in which the trade scale between Korea and China will exceed $100 billion.

According to this forecast, the government decided to dispatch the investigation team during the Korean products exhibition which will be held at Beijing in September, to establish the plan to expand the exports and the investments to China by constituting the task force team in which the Korea International Trade Association (KITA) and the various business organizations will take part together.

The Ministry of Commerce, Industry and Energy (MOCIE) presented the bright prospect for exports to China in the report `The Impacts of Beijing`s Olympics hosting on our economy`. The report analyzed that Korea would be the biggest beneficiary from a special procurement boom which will be created by the Beijing Olympics on the basis of the Korea`s regional and cultural adjacency and its experiences to host the Olympics.

The MOCIE expected that China will show the stable growth of over yearly average of 8 percent until 2008 thanks to the expansion of investments related to Olympics and the foreigners` investments, and the Korea`s exports to China will also increase by 15 percent per year.

And it forecasted that following the increase of the exports, the imports from China will also mark the growth of over 15 percent yearly, and thus the trade scale between Korea and China will pass over $50 billion in 2004 and will reach $100 billion, marking the exports of $56.5 billion and the imports of $ 46 billion.

Among the Korea`s exporting goods, the MOCIE counted the followings as the special demand exports due to the Olympics ¡ãthe construction materials such as reinforcing rod and cement, ¡ã the Digital Electronics such as Digital TV, Plazma Display Panel (PDP), broadcasting equipments, computer and optical cable ¡ãthe accommodation machinery such as bus, car, electric train, and the high-class durable consumer goods, ¡ãthe information and communication such as the communication equipment, and mobile phone, and ¡ãthe pollution protection facility such as dust collector and waste water disposal plant. And MOCIE expected that the domestic construction companies will be able to take part in the constructions of the stadium, hotel, airport and highway needed to host the Olympics.

An official of the MOCIE told that ``if China joins the World Trade Organization (WTO) and hosts the Olympics, its GNP may reach $2 trillion in 2010, and thus will play a role of engine to ceaselessly create the demands in the Northeast Asian region for the next 10 years. Since the major companies around the world will actively attack the Chinese market, the domestic companies are required of more positive marketing.

Especially, the domestic companies should expand the strategic industrial cooperation with China through the joint investment and the cooperative development utilizing the geographical and cultural advantages, and should advance into the Chinese market with their own brand names through the cultural and sports marketing, added the MOCIE official.

Kim Sang-Chul sckim007@donga.com