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[Editorial] The Chinese Example

Posted October. 17, 2007 03:20,   


Hu Jintao, the leader of the People’s Republic of China, delivered a speech at the plenary session of the 17th National Congress of the Communist Party of China yesterday, saying, “Reform and opening are the way no matter what happens, and business should play a leading role in this revolution.”

Ever since 1978 when Deng Xiaoping launched a wealth-first campaign, China has maintained its reform policy. Since then, this policy has rendered China great economic power; it now has the world’s fourth-highest GDP. Despite the success, China still stresses the importance of reforms.

Amid these developments, Korea should prepare itself to adapt to a new environment promoted by the rapid advancement of China. In fact, there is an impression that China seems to have more market sense than we do. The idea that if we settle for current conditions, South Korea will be caught by its pupil is gaining more conviction these days. First of all, rather than focusing on our major industry sectors, such as steel, cars, and shipbuilding, we should shift our attention to higher value-added and high-tech businesses. Without strategic preparation, we can hardly survive between China and Japan.

On the other hand, it is very ironic that North Korea, which is significantly influenced by China, doesn’t show any enthusiasm about opening-up and reform. The case of Vietnam, whose president Ngo Dinh Diem visited North Korea yesterday at the invitation of North Korea National Defense Committee Chairman Kim Jong Il, has taken a different direction. Following China, the country has left its poverty trap and chronic low economic growth. Since 1986, when Vietnam promoted its Doi Moi reform policy, its annual growth rate has increased 7 to 9 percent. Furthermore, it attracted foreign investment, and the construction of infrastructure for the development of manufacturing industry has continued. All of this comes from its good use of market forces.

North Korea is an exception. As we speak, North Korean citizens are suffering from hunger and poverty. Last year’s North Korean income per capita was 1,100 dollars, which is one seventeenth of South Korea’s. Without the international aid that became available due to its nuclear dispute settlement, North Korea would barely make ends meet. This is the result of a policy that has ignored the market and kept its doors closed. North Korea should admit that “socialism, North Korea style” doesn’t have the answers.

The direction of South Korea’s policy toward North Korea should be geared to encourage North Korea to open its doors and carry out reforms. South Korean President Roh Moo-hyun said, “It is not a desirable action to call for North Korea to open its doors and reform its system” after his official visit to North Korea. That is not appropriate. We should speak the words that Chairman Kim Jong Il doesn’t want to hear. The Chinese experience should convince us that South Korea’s unilateral aid won’t save North Korea.