Thursday, April 14, 2005

Korea v. China

Strategic Choices in Science and Technology
Korea in the Era of a Rising China
Somi Seong, Stephen W. Popper
Prepared for the Korea Institute of Science and Technology Evaluation and Planning

A very important Read for Those concerned with the introduction of China(you could include India) into the World economy. It actually requires a Second or Third Read for Those truly interested. Salient Points:

Korea’s list of potential threats from China is considerable:
the hollowing out of the manufacturing sector, job loss, and
loss of shares of the world market and the China market.

The number of scientists and engineers per 10,000
population in Korea is 2.5 times that of China, whereas the absolute
number of full-time equivalent scientists and engineers of China is
seven times that of Korea. China’s large and increasing number of
S&T personnel gives it an obvious advantage in human resources.
China currently ranks second in the world in number of R&D personnel.
It has more doctoral degree holders than Japan, and the
number of Chinese who have completed higher education in the
S&T field is close to that of the United States. China’s full-time
equivalent R&D personnel was over 1 million in 2002, second only
to that of the United States and roughly six times that of Korea.

By the end of 2002, the number of employees in foreigninvested
enterprises (FIEs) had reached 23.5 million, accounting for
11 percent of China’s urban workforce. FIEs have conducted extensive
training of Chinese employees to enable them to use the advanced
technologies supplied by the FIEs and to operate within their
advanced management systems. In 2002, FIEs accounted for 33.4
percent of China’s industrial output, 52.2 percent of its total export,
and 21 percent of its tax revenue.

Students of Chinese History and Development find a consistency which will be a disappointment to foreign Investors, especially Western Corporate industries. The core of Chinese development suggests the traditional practice of integrating foreign innovations through replicative skill acquirement, then limitation of foreign access to internal Chinese markets. Smaller industrial Powers like Korea will find less threat from Chinese economic expansion as Chinese industry switches to internal market supply, though Korean Exports to China will decrease greatly.

This Author estimates China will maintain its Population policy to induce rapid reduction of Population over the next Century, coupled with pressured education of the Young, while suppressing actual Wages so as to keep Chinese production competitive with World production without opening its internal markets. Current Chinese leadership will not substantially alter its Currency policy either, as They intend for Foreign investment to finance the construction of Chinese industrial capacity. Who says old Communists are dumb? lgl

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