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Korean Views on Japanese Society and Economy are Changing

Japan is a popular topic of discussion among Koreans. The themes used to focus mainly on a) how bad the Japanese were during their 34-year colonization of Korea and b) how advanced they are and that it would really be nice to catch up.

Today, the tone is much different.

Koreans still talk about how much they resent the Japanese colonization, but now that Korea's on a roll with the success of its economy and popularity of Korean culture throughout Asia (and even in Japan), and as Japan's still working through its 20-year funk, Koreans are gaining quite a bit of confidence in their analysis of Japanese society and economy and where it's all going.

9-21-2012 12-34-35 AMI remember seeing the Korean book on the right at the bookstore recently denying that the Japanese "samurai" concept is anything more than a modern myth (사무라이정신은 거짓! - The Samurai Spirit is a Lie!). A recent study by Citigroup estimates that Korea will have the 4th highest per-capita GDP in the world in about forty years (and far higher than Japan). I often hear about how the Japanese are "becoming soft" and how they've lost their motivation to succeed, as exemplified by the opinion of one Korean I heard say that Korean young people and Japanese young people don't have a lot to talk about because Japanese young people are more concerned about part-time job working conditions than they are about developing their careers. I even came across some discussion online recently about some Western fortune teller who predicted that Japan will become a Korean colony within the next thirty years; of course, this prediction was met with a lot of interest and enthusiasm by Koreans.

Recent Korean opinions about the Dokdo Island issue are pretty uniform; I have yet to find a single Korean who can express with any sympathy the Japanese argument for why the islands historically belong to Japan. The closest I've heard is the position of a professor at Hanyang University saying that because so much of Korean culture and so many Koreans (commoners, royals and artisans) emigrated to Japan over the past one or two thousand years or so, Japanese see Korea as their long-lost half and so they can't understand why Koreans behave with such independence if, in reality, they're the same people. Thus, on this argument, Japanese claims on Dokdo boil down to the idea that it doesn't really matter whether Dokdo was a recognized Korean territory long ago or whether the Japanese rightly claimed it in the late 1900s; the Japanese are just claiming what's been theirs all along.

One point I can't quite get a clear viewpoint on is whether Japan is still ahead of Korea or not. According to a recent article mentioned on Korea Business Central, the Korean standard of living is on par with that of Japan. But more commonly I hear that the Japanese economy is 4-5 times larger than the Korean one and that Korea is still decades away from catching up on a per-capita GDP basis.

In a recent conversation, the opinion came up that Japan is turning inward, as Korea is becoming more international (and in particular, more like the US, which is an assertion I hear quite a bit). When I pointed out that, from what I've heard, Tokyo is a lot more cosmopolitan than Seoul, I was told that this is only a surface thing and that the Japanese maintain a distance between themselves and anything foreign... or else they find a way to make that foreign thing Japanese. I tend to think a good number of non-Koreans would say the same things about Korea, but my point here is to draw the distinction between the Korean view of themselves and their view of Japan.


A Recap of Mark Minton's Interview on Korea Business Central - "Helping the World Understand Modern Korea and Korea’s Place in Asia"

Author_book_mm Understanding Korea and Koreans from the wider geopolitical context yields important insights into the newly confident nation we find today. Anyone doing business in this dynamic economy can expect to increase their effectiveness by learning about recent Korean history and its position in the region.

Mark Minton boasts of a long history in E. Asia, as a US diplomat in Japan and Korea, and later in Mongolia as US Ambassador. In this discussion with KBC host Tom Tucker, Ambassador Minton shares deep insights about modern Korea and doing business there.

Click here to listen to the interview, download the .mp3, subscribe in iTunes, read the transcript and or discuss this interview and this topic with other members of Korea Business Central visit the English-language discussion link.

Click here for the full list of interviews in the 2011 Korea Business Interview Series, or here for the 2010 interviews.

I also tried something new this time, which was to prepare my own short video synopsis of the interview:

 

Main Points of the Interview

Topic #1 - Ambassador Mark Minton and The Korea Society, An Overview

  • In between stints in Asia, Ambassador Minton also spent long periods of his career in New York City, with the Foreign Service, as well as the US Mission to the United Nations, and now with the Korea Society. He notes that in the short period of time between his previous time in NYC and now, the profile of Korean culture films and arts has risen dramatically.
  • The Korea Society is the foremost and oldest non-profit private organization in the US dedicated to expanding understanding of Korea in the US and promoting exchange between the American and Korean people. It was established by General Van Fleet, who had been a US general in the Korean War. The Society has grown along with the increasing success of Korea.
  • Lately the Society has been active in promoting Korean film with the Museum of the Moving Image in New York though a large, annual film festival.

Topic #2 - The Korea-Japan Relationship

  • The relationship between Korea and Japan has been difficult, perhaps because the two countries are so close in proximity but have distinct cultures. This historical friction is dissipating quickly with the younger generations in each country extremely interested in each other. Tourism is rising fast.
  • The interests of the two countries, being successful economies and democracies, are converging in the modern era. The current administration of Korean President Lee Myung-bak has handled relations with Japan with a mature, sophisticated and sensitive approach.
  • The Japanese have looked at the Korean achievements of the last 25-30 years and truly respect it and have been impressed by it. 
  • Japan was the first East Asian country to successfully modernize and as Korea was a late-comer to this development, Korean President Park Chung-hee, explicitly folled Japanese models, though he used them with Korean characteristics. Today, Korea is increasingly innovating on its own.
  • It is clear that there's still a symbiotic relationship between Japan and Korea, but Koreans will expand even further to take on other partners, especially as Korea signs FTAs with more and more other countries and sells its products around the world.

Topic #3 - The Korea-Mongolia Relationship

  • Ambassador Minton served as US Ambassador to Mongolia from September 2006 until September 2009. 
  • Mongolia is the only true democracy in central Asia, making it politically and culturally unique in the region. It is located between China and Russia and so its foreign policy is to reach out to the broader world, economically, policically and diplomatically, so that it has options beyond just China and Russia.
  • Mongolians consider Koreans to be the closest people in the world to them. History shows there has been some migratory connection between Mongolia and Korea in the past, and the two countries share cultural characteristics, which makes Mongolians feel comfortable dealing with Koreans.
  • Going forward, we will be hearing more and more about Mongolia as world-class mineral assets in uranium, coal, copper, gold and others come online. Major mining companies are just now beginning to develop these assets, which are some of the largest undeveloped deposits in the world. It is expected that the Mongolian economy will start growing at around 10% per year over the next decade.
  • Korea is looking to Mongolia as a source of raw materials, but Korean construction companies are also well-placed to build the infrastructure that Mongolia is going to need for its new economy.
  • Mongolia may also become an attractive tourist destination for Koreans, as it's only two and a half hours by plane from Seoul. There is a lot of open space and beautiful scenery.
  • China is the 800-pound gorilla in the living room for Mongolia, which dictates that China will be the major customer for Mongolian resources. But Mongolia is also looking to develop other partnerships, and Korea has a major role to play in this.

Topic #4 - Significant Events in Modern Korean History

  • The Korea Society recently held a seminar to discuss the new book "The Park Chung Hee Era". President Park is the modern figure who transformed the Korean economy and created the foundation for what the Korean economy has become today.
  • There is a lot of debate even today about the extent to which the policies of the Park era may have retarded political developments of the country. 
  • Looking at the major events of modern Korean history, we can see that each led to the next. The Park Chung Hee coup d'etat of 1961 fired the trigger, but its success in raising the living standards of Koreans lead to protests for more freedoms with the Gwangju Uprising in 1980 and the June Democracy Movement of 1987, and ultimately to democracy.

Topic #5 - Korean Viewpoint on the Signing of FTAs

  • By signing FTAs with the US and with the EU, as well as other countries, Korea is looking to draw itself closer to these major Western economies, which will have all sorts of positive payoffs and benefits for the relationship as a whole, including as a counterweight to China as Korea's trade with China increases.
  • In addition, the US-Korea FTA is so complex and well-considered that it reaches into so many regulations, laws and practices, that when it is implemented, it will have an effect of enhancing the efficiency and transparency of the Korean domestic economy and the way it is managed, bringing Korean activities up to international norms.

Topic #6 - "The Hub of Korea"

  • Korea has considerable assets to become a hub. It is geographically positioned this way in northeast Asia and is complemented by the marvelous Incheon Airport, as well as Songdo city, which is an attempt to create virtually a complete new city oriented towards international commerce and business.
  • Korea also has a role to play as a hub in the politcal dimension, too. As host of the G20 meeting last year, as of the Nuclear Nonproliferation Summit next year, Korea is increasingly becoming a kind of honest broker in international politics, as well as diplomacy. This is reinforced by the symbolism of the re-election of Korean Ban Ki-moon as Secretary General of the United Nations.

Topic #7 - Wrap-Up

  • When we think of "Korea" these days, we inevitably think of something contemporary first. A good keyword to use to describe Korea would be "successful innovation", not only in economics, but also in political, cultural and international diplomacy, too.
  • Going forward, The Korea Society is looking to capitalize on "Hallyu", or the Korean Wave, which is beginning to take hold in the United States as well. There's a growing awareness of the world of arts and design in Korea, particularly Korean film and literature. 

A Recap of Peter Bartholomew's Interview on Korea Business Central - "Promoting the Value of High-Tech Shipbuilding and Traditional Architecture in Korea"

Author_book_pbThere are few people more qualified to discuss the Korean economic miracle than Peter Bartholomew. Having arrived as a Peace Corps volunteer, he has remained in Korea almost continuously since 1968. Peter worked in a Korean company for almost a decade in the 1970s, and for the last 28 years, he has run IRC, Ltd. in Seoul, specializing in the shipbuilding and construction sectors.

In this interview, Peter shares deep insights about Korean business, including techniques for negotiating with Koreans, as well as about efforts to preserve traditional hanok homes, an area on which he is particularly passionate. He believes that a modern Korea should be compatible with maintaining the natural and historical assets of the past.

Click here to listen to the interview, download the .mp3, subscribe in iTunes, read the transcript and or discuss this interview and this topic with other members of Korea Business Central visit the English-language discussion link.

Click here for the full list of interviews in the 2011 Korea Business Interview Series, or here for the 2010 interviews.

Main Points of the Interview

Topic #1 - Personal Background in Korea

  • Peter arrived in Korea in January 1968 with the US Peace Corps and spent five years along the northeast coast of the country. He started working for a Korean company in 1972 and stayed there for eight years. In 1982, Peter founded IRC with some partners and is still operating the company today.
  • The biggest change in Korea over the last forty years is the economic development of the country. Even in the 1970s, there were virtually no paved roads in the countryside and even electricity wasn't widespread. Cars shared the road with oxcarts. There were no highways and very little manufacturing; it was primarily an agro/fisheries economy.
  • Koreans today can be described with words like persistence, hardworking, impatient, aggressive and hungry for knowledge. Friendships in Korea last a long-time.

Topic #2 - Shipbuilding in Korea

  • The three big shiyards in Korea are Hyundai (80-85 ships per year), Daewoo (40-50 ships per year) and Samsung (40-50 ships per year). 
  • STX's shipyard in Korea is small but they have built a new shipyard in Dalian, China. Hanjin's is the oldest Korean yard, located in downtown Busan, but they've also got a huge shipyard in Subic Bay, Philippines, too.
  • The Korean majors are notable for their diversification, having expanded into offshore oil and gas structures, as well as drilling ships.
  • Peter's role at IRC is to organize custom shipbuilding programs for vessels that have never been built before. He identifies the best Korean resources (not just shipyards, but also specialist services and products) and helps in negotiating the deals, having completed over 100 projects in the last thirty years. 
  • Koreans shipbuilders have a diversified spectrum of products, not just ordinary container ships and bulk carriers, but also sophisticated L&G carriers and others, such as the new types of structures for the offshore industry, as well as industrial structures build in modular form to be assembled on-site. This diversification gives Korean makers longer-term stability.
  • The core speciality in Korea is production engineering and productivity. This has been achieved by taking the industry to a new level of high tech, with exensive automation, excruciatingly sophisticated computerized control of production and scheduling. They are at least as good as the Japanese, but much better than the Europeans and Chinese in this regard.
  • The Chinese can be expected to take more and more of the low-cost/low-tech business from the Koreans, but the Koreans are moving up the value chain quickly.
  • The Koreans also benefit from a strategic mistake the Japanese made many years ago where they decided to emphasize pre-designed standardized ships. This limits the Japanese' ability to produce new designs.
  • It should be remembered that shipyards are really just huge, multi-disciplined industrial structure manufacturing facilities. Among those structures, some float and some don't. As the Koreans are strong in this aspect of finding new ways to excel, we can expect them to keep diversifying, including into the green energy industrial structures, such as large turbine windmills. The Koreans are also expanding overseas, as mentioned above, and STX even owns yards in Europe. 

Topic #3 - Korean Business in General

  • The Korean conglomerates ("chaebol") are moving from strength to strength and this success can be expected to continue. But what the Japanese have that the Koreans don't have is a strong small- to medium-sized company community. The Koreans are too dependent on the chaebol and this is a major weakness of the Korean economy.
  • Korean business is weak in services and in many aspects of management. There's high productivity on the shop floor, but low productivity in the office and in software.
  • When comparing Korea with Japan, it's also helpful to remember that Japan started industrializing nearly 100 years before Korea and so the Korean economy is like a cake that's grown too fast; it's all full of holes. Now Koreans are going back and filling those holes, one-by-one, but it takes time. 
  • Korean young people are going overseas to study in record numbers and they're bringing back new and innovative ideas. Once the generational shift kicks in and and the new generation moves into positions of power, the shift to a stronger small/medium-sized company sector, as well as better software and management capabilities, will take place.
  • Changes in Korea won't come from hiring in foreigners to positions of management authority but through an evolutionary, incremental process, developed within the crucible of Korea's own cultural persona and psychology.

Topic #4 - Negotiating with Koreans

  • When negotiating with a top-end multinational Korean company, the people there will have broad, international exposure and experience so negotiations can take place on international terms and conditions.
  • Koreans are price buyers and so if you're trying to sell to Koreans, once the basic qualifications are set, the Koreans are really only interested in price.
  • Unsophisticated small/medium industry companies get upset when they see a Western contract. Contracts between Koreans are often shockingly short, naming what the product is, how much and that's it. It's a totally different concept toward documentation and legal contracting.
  • So what the foreigner has to do to achieve his ends is to do adequate advance research. What kind of entity is the Korean party which whom he's negotiating? What previous contracts or negotiations have been accomplished? Which are successful and why? The Western company should approach the negotiations based on this.
  • When dealing with a small/medium industry company, a full-blown 25-page contract is a non-starter. The contract must be boiled down to basic, fundamental, can't-live-without-it terms and conditions. Everything has to be done in Korean, with some kind of legal and language assistance along the way.
  • A good way to bring a drawn-out negotiation to a close is to offer to split the difference 50/50.
  • When negotiating, make sure to always ask yourself "Do they really undderstand the points I'm trying to get across?". Continuously summarize in simple form. List clear, short options. This is because there aren't just language problems, but also cultural psychology difference problems. 60-70% of the major contract disagreements are caused by a failure to understand at the beginning.

Topic #5 - Hanok and the Korean Land Development Model

  • Peter has lived in the same Korean traditional style house ("hanok") for the last 35 years. Recently, the city government tried to demolish it to make way for a new development but Peter and a group of neighbors joined forces to successfully block this in court.
  • Koreans don't put value on old buildings. In the US and Europe, we can find many old style homes that are more than 100 years old. But in Korea, after 20 years, a building doesn't have any value; only the land has value.
  • Even restoration projects often involve tearing down old and replacing with new construction, such as the current "rebuilding" of the traditional south gate to the city of Suwon.
  • The years of rampant development, destroying old neighborhoods and natural beauty, to build new cities and developments is finally coming to an end. Ultimately, the government must stop deciding and planning these things without consideration for the market and environment.

Topic #6 - Wrap-Up

  • The position of Korea between China and Japan is absolutely ideal for Western companies looking for a base in north-east Asia. IRC is actively seeking companies whose services and/or products would be valuable in Korea, in order to support them in this process.
  • The key factor of doing business successfuully in Korea and in Asia is to do your homework about the companies or government entities with whom you need to interface to achieve whatever business aims you have. Don't assume that business is done everywhere the same or that there's going to be a magic bullet.

"I'm Just Happy to Help Anywhere I Can" - Article About Me In the Chosun Ilbo Newspaper Today

The following short article about me appeared in the Chosun Ilbo today:

[수도권I] [경기도 이 사람] "내 도움 필요한 곳이면 어디든 OK"

입력 : 2011.03.10 23:01

[경기도 이 사람] 외국인투자유치 자문관 스티븐 밤멜
한국은 우리가족의 나라… 안산, 특히 살기좋은 곳

"잘 다니는 산이 있고, 길 안 막히고, 집값은 서울보다 싸고, 서해안 고속도로가 바로 옆에 있어서 지방여행 갈 수 있고, 서울 오가기도 편하고…."

경기도 안산시 상록구 성포동에 가면 "경기도와 안산은 나의 한국 고향"이라고 말하는 푸른 눈의 외국인이 있다. 지난 1993년 처음으로 한국 땅을 밟고 안산시에 살고있는 스티븐 밤멜(41·미국)씨다. 경기도와 안산시가 어떤 이유로 살기 좋으냐고 묻자, 대답이 끊이지 않는다. 밤멜씨는 "안산 지리를 잘 알아서 나중에 택시기사도 할 수 있을 것 같다"며 웃었다.

2011031002657_0

▲ 스티븐 밤멜씨는“매주 주말이면 한국 곳곳에 여행 가는 것을 즐긴다”고 말했다. 사진은 밤멜씨가 부인, 자녀들과 작년 10월 서울 상암동 억새축제를 찾았을 때의 모습.
밤멜씨는 경기도와 안산시에 대한 애정이 크다. 안산시에서 산 지는 18년째가 됐고, 작년 2월 경기도 외국인투자유치 자문관, 같은 해 4월 경기도 외투기업협의회 자문위원으로 위촉돼 활동 중이다. 2008년 우연한 자리에서 김문수 경기도지사를 만난 게 인연이 됐다고 한다. 한국어와 영어 통·번역 사업을 하고 있어 활동이 많은 편은 아니지만 지난달 25일 김 지사의 트위터에 "앞으로 경기도를 위해서 열심히 노력하겠습니다!"라고 글을 남길 만큼 경기도에 대한 열정이 웬만한 도민 못지않다. 밤멜씨는 "지난 2월에는 안산에 있는 한양대학교에서 석사학위(경영전략)도 땄다"고 했다.

미국에서 대학을 졸업하고 '색다른 삶'을 꿈꾸던 밤멜씨는 1993년 한국에 들어와 안산에서 영어학원강사로 일했다. 1994년 무역회사(LG상사)로 옮겨 5년 반 동안 일했는데 이 과정에서 지금의 한국인 아내 유명희씨를 만나 1996년에 결혼, 딸 유트레저(12·영문이름 Treasure Bammel)와 아들 유카버리(11·영문이름 Cauvery Bammel)를 낳아 함께 살고 있다. 자녀들의 한국 성(姓)은 부인 유씨의 성을 땄고, 이름은 영어이름으로 지었다. 자녀들이 어릴 때는 미국과 한국을 오가며 생활하기도 했지만, 3년 전부터 딸과 아들을 외국인학교가 아닌 한국 초등학교에 다니게 하면서 키우는 중이다. 밤멜씨는 "딸이 처음 한국에 와서는 한국어가 너무 느려 고생을 했지만 지금은 잘 지낸다"며 웃었다.

밤멜씨는 회원이 1200명가량인 웹사이트도 운영하며 한국에서의 삶의 '폭'을 넓히고 있다. 주로 한국에서 일하는 외국인들이 모여 정보와 이야기를 나누고 모임도 갖는다고 한다. 밤멜씨는 "한국에 와서 좋은 사람들을 만나 도움을 많이 받으며 즐겁게 살고 있다"며 "경기도 외투기업협의회 자문위원이 된 이후 많은 활동을 하지는 못했지만, 언제든지 부탁이 들어오면 도와드리고 싶다"고 말했다.

Link to original article posting.


Copycats!

I've been trying hard at Korea Business Central to defend Koreans from charges that the Korean education system stifles creativity in meaningful ways and to say that Korea is moving beyond their past ways of simply "benchmarking" against successful business approaches in the West.

They don't make my job any easier though with the following examples. Copying the business model is one thing, but copying every last aspects of a site (all the way down to site name and color scheme, in the case of LinkNow) is pretty galling... 

LinkedIn vs. LinkNow

1-18-2011 3-08-23 PM

 

1-18-2011 3-08-50 PM

Groupon Vs. KooKooFun

1-18-2011 3-11-24 PM
1-18-2011 3-13-57 PM


I Was Quoted in The Korea Times about Investors in Korea

Here's an article from the December 20, 2010 issue of the Korea Times:

Chinese investor pulls out due to tension

By Cathy Rose A. Garcia 

Some prospective foreign investors are increasingly becoming concerned about the escalating tension on the Korean Peninsula, with one Chinese investor already postponing plans to invest in a major property development project in Incheon.

The brouhaha over South Korean military’s live-fire artillery exercise Monday further increased the tension between the two Koreas. Last month North Korea opened fire on Yeonpyeong Island, killing four people ― two South Korean marines and two civilians. 

Joseph Chiang, president of Lippo Incheon Development, said the situation between South and North Korea has affected the company’s marketing efforts for Midan City, a leisure and tourism-oriented project on Yeongjong Island. 

`` (The situation) does affect our marketing efforts. One large investor in China made up their mind to invest, but due to this situation, they had to postpone action till further developments,’’ Chiang told The Korea Times. 

Several Chinese investors had earlier expressed interest in investing in Midan City, which is part of the Incheon Free Economic Zone. The project is envisioned as an ``all-in-one-city’’ with shopping malls, resort hotels, medical facilities, a golf village and entertainment facilities.

It seems the extensive international news coverage on North Korea’s shelling of Yeonpyeong Island last month has made a dent in South Korea’s image.

Steven S. Bammel, president of Korea Consulting & Translation Service, said the situation between the two Koreas is certainly affecting the nerves of foreign investors in South Korea. 

``There’s no doubt that foreign investors looking at Korea hesitate when they see the situation. With so many other less risky but attractive investment destinations elsewhere in East Asia, Korea loses out. For example, after the Cheonan (navy boat sinking) incident in the spring, I had a client cancel a trip to Korea and other clients have asked me nervously what’s going on,’’ Bammel told The Korea Times. 

However, for many expatriate businessmen already living in Seoul, the current tension on the Korean Peninsula may not make much of an impact in their daily lives and future business plans. 

Bammel, who also runs the website KoreaBusinessCentral.com (KBC), said there has been surprisingly little concern shown by KBC members in the North Korean situation. 

``I’d say the average member is thinking more about day-to-day business and life than about war; this mirrors the views in Korean society at large. I’ve been posting to a discussion on the 60th anniversary of the Korean War for several months now but it gets far fewer comments than a discussion about the challenges of foreigners working in Korean companies,’’ Bammel said. 

A European businessman, who declined to be identified, admitted that his business partners from abroad have called to check on the current situation. ``I assured him it was business as usual, but it’s difficult to say what North Korea will do,’’ the businessman said.

The timing of South Korea’s live-fire artillery exercise coincides with the start of the annual Christmas holidays for many expatriates in Seoul. This means foreign officials at the various chambers of commerce have left or are planning to leave for abroad this week. The Korea Times tried to contact officials at the American Chamber of Commerce in Korea, European Union Chamber of Commerce in Korea and Australian Chamber of Commerce in Korea, but was told that they were out of the country.

cathy@koreatimes.co.kr

Link to original article.

 


A Recap of Martin Roll's Exclusive Interview on Korea Business Central

Mr_author_bookMartin Roll is a world-renowned thought-leader on value creation through brand equity, and the eighth interviewee in our Korea Business Interview Series hosted at KoreaBusinessCentral.com.

Martin Roll is Danish by origin, but currently based out of  Singapore. He spent most of his career in international advertising and media before setting up his own consultancy ten years ago. Martin consults in around 40 countries every year, specializing in helping clients produce better results through brands, not in terms of colors and logos, but in forming and shaping business strategies on the two platforms of branding and marketing. Martin's clients include some of the top 20 Korean corporations.

To listen to the interview, download the .mp3, subscribe on iTunes, read the transcript and/or discuss his interview and this topic with members of Korea Business Central, visit the following discussion link: http://www.koreabusinesscentral.com/forum/topics/korea-business-central-7.

(The full list of interviews in the Korea Business Interview Series is help here: http://www.koreabusinesscentral.com/page/interviews-2)

Main Points of the Interview:

Topic #1 - About Asian & Korean Brands

  • Ten years ago, Asia boasted barely five or ten global brands. However, at that time, the top Korean brands had an appetite for going global.
  • The Asian brand leadership model, as outlined in Martin's book Asian Brand Strategy, is based on the following five principles.
  1. Asian boardrooms need to change their mindsets and practices so that branding is lead by the CEO and the boardroom.
  2. Asian consumer patterns are not all that homogeneous and it is necessary to look at Asia as a patchwork of different cultures.
  3. Asian consumers are becoming increasingly modern.
  4. Asian companies need to become trendsetters and not just copycats.
  5. Make sure everyone in the company is empowered around the brand.
  • The leading Korean companies all have Chief Marketing Officers now but only 2-3% of the Fortune 500 companies have one, which means marketing for most companies is still tactical, not strategic. 
  • Singapore Airlines is a leading Asian brand that has been true to their roots and origin by actually delivering the great service they promise. They spend 15-20 working days every year on training everyone within the company. They also invest a lot in new aircraft and technology so that they contribute as much as 20% to the national brand of Singapore.
  • Other notable Asian non-Korean brands include HSBC, Samsung, Toyota and ASA (including its two hotel chains Banyan Tree and Mandarin Oriental).
  • Samsung is the brand that brought Korea to the world. LG is now pursuing this same journey, but in a different way. Hyundai is the other top Korean corporation in terms of branding.
  • Amore Pacific is an interesting Korean brand that is now one of the fastest expanding cosmetics brands in China by representing ten different organically grown brands.
  • Korean brands are very good in innovating. Though they have not necessarily been first-movers, they have moved fast and are starting to gain confidence. Design is another area that Asian brands are starting to take notice of. 
  • Korean brands are a hit because Korea is so technology driven and Korean companies are innovative and spend a lot on R&D. They are quality focused, such that Korean brands are, in many ways, ahead of the rest of the Asia-Pacific region in this aspect.
  • It took Western brands 50-100 years to do what Asian brands have done in 10-20 years.
  • A strong brand has two components: 1) a strong functional offering and 2) the emotional aspects. Korean brands are stronger in the functional dimensions than they are in the emotional component. This journey of establishing emotional bonds with consumers can take 10-20 years to fully develop.
  • As global corporations begin to all sell at the same quality and price levels, branding becomes the only differentiating point available, which makes it more important than ever. People don't buy functional things but rather buy on the emotional aspects. Asian firms need to bring something to market that is different than others or they won't create a strong bond with their consumers.
  • Asian firms need to be more confident in their own cultures and realize that the global consumer has a huge appetite for Asia and for Asian heritage.
  • Asian brands need to follow three methodologies to move beyond local markets: 1) get the strategy right through an orchestrated effort led from the top, 2) make sure they have the time, resources and money budgeted and 3) get the entire corporate culture involved in the effort.
  • Korean firms tend to employ mostly Koreans. Even though a lot of very good Korean talent has lived overseas and come back to work in Korea, Korean companies still aren't achieving a global culture like you can find in Nike, L'Oreal and Procter and Gamble. To become a global company, Korean companies need to mirror the global consumer in their corporate makeup but Korean companies are behind the curve in this trend.
  • Success by foreign companies in the Korean market is incredibly difficult, in part because Korean brands are so strong locally. But the Korean market is attractive because of the buying power and consumer interest, which is also influenced by national pride. 
  • Foreign firms in Korea succeed by being satisfied to remain at number two or three in the market and by taking a long-term perspective. It's not necessary to localize as much in Korea as in other markets since the foreignness of the brand is often what brought the Western brand to Korea in the first place.
  • Foreign companies that have been successful in Korea include Nike, Coca-Cola and Proctor and Gamble. They aren't taking a leading market share, but they are doing well in terms of branding and financial return.

Topic #2 - Branding the Boardroom

  • The company CEO's emphasis on branding is crucial to successful brand development. You can't build a brand from the bottom up, particularly in Asia. It is necessary to have a mindset that everything you do within the company is actually cascading around a common brand practice, and a common brand strategy.
  • Human resource practices in Asian firms are centered around the functional aspects, and not in really rallying people around the brand and what the company is all about.
  • A multi-talented boardroom that represents different cultures and different functions is important in order to make sure it represents the people who are going to move the brand forward in the global marketplace.
  • As China works to build its own brands, Korean companies need to work even harder over the next 5-15 years to get out into the global market as soon as possible.
  • Martin's response to Korean executives who ask if global consumers will really like what Korean companies are doing is, "Yes, they will. They love things that come from Korea because you have a fantastic offering; you have great quality, innovation and design. Push it out into the global market!"

Topic #3 - Branding Korea Inc.

  • One challenge for Korea in terms of branding the country is that there have been too many stakeholders involved in the effort. So Korean branding efforts are fragmented. Simple strategic systems need to be put in place from the center to bring things together.
  • Still, just 10-15 years back, Korea was relatively unknown; but as people come to find out about Korea, they are surprised and interested.
  • Key points of advice to Korea for promoting the Korean brand internationally: 1) Korea needs to set up a presidential task force lead by the president, 2) simplify the command structure for the national branding efforts, and 3) simplify and consolidate the message around three to five key messages and then focus on those for the next 5-10 years.
  • Martin recommends the following three attributes about Korea on which to build this strategy: 1) Business Korea, 2) Innovative Society, and 3) Tourism
  • In terms of tourism, the messages coming out of the various regions of Korea need to be orchestrated under the umbrella of Korea as a nation. 

Kolkata, The Koreans, Samsung, Michael Breen and the Rest of Us Expat Patronizers

From: http://pages.cthome.net/india2/On Sudder Street in Kolkata, India (see photo at right, which is not mine; click to see original page) in late 1989, I formed my most vivid memory of anti-Americanism. I was having breakfast at a small coffee shop frequented by foreign backpackers and the room was crowded so there were multiple strangers to a table. Somehow – and I don’t remember the details at all – I got into a political discussion with a guy from France. He was criticizing something about the US government and I took umbrage to it. I was naïve, sure – should have known better – but there was something about others attacking my country that really rubbed me the wrong way that day. Before I knew it, the entire coffee shop of mainly Europeans was in an uproar and I ended up leaving without finishing breakfast.

That was me, an American in India, getting upset with what others were saying about my country; imagine how the average American would feel if, say, a Brit came to the US, lived there for three decades, wrote a book explaining the American psyche to non-Americans and got himself a column in an American newspaper where he published patronizing and, at times, insulting analyses of US society?

6a011279704a5b28a40120a831a08a970b-500wiI already shared my opinion about The Koreans: Who They Are, What They Want, Where Their Future Lies by Michael Breen back in January. (Click here for my book review…. Incidentally, Breen’s a Brit who’s lived in Korea for about 30 years, wrote a book and authors a column for a Korean paper.) In my article, I was pretty critical of Breen’s stereotypical expat-oriented approach to explaining Korea and Koreans. 

But in fact, before reading the book, I’d never heard of Mr. Breen. This isn’t his fault though; it’s more indicative of my isolation from expat society in Korea since Breen’s the “real thing” when it comes to long-term expats in Korea.

My second experience with Mr. Breen was just a few weeks ago when I picked up a Korea Times newspaper looking for information about classified advertising. I realized then that he writes a column for the newspaper and the article I read there was about Korean-American Robert Park’s illegal entry to North Korea to protest against the regime. Breen challenged Koreans with this (paraphrased) question: “Why do Koreans care so much about Dokdo while North Korea is murdering millions of citizens and testing nuclear weapons? If the answer is that Koreans aren’t willing to stand up for important issues themselves, then they should at least be grateful to the foreigners that do it for them.”

OK, fine. It seemed a little edgy and moralizing, but the point was worth bringing up; and surely outsiders have a role to play in bringing fresh perspective into the understanding of Korea. But my respect for Breen’s commentary here is diluted by a lot of what he said in The Koreans. And as it turns out, the Robert Park article apparently was not Breen's worst.

Back in December, Breen published a piece in this same Korea Times column ridiculing corruption in Korea through a satirical spoof. In particular, he made fun of Samsung Chairman Lee Kun-hee. The column has long since been removed from the Korea Times site I’m sure, so I can’t provide a link to it now. But here’s a link to an article about Samsung’s reaction, which included a $1 million civil suit against Breen for libel. And just today, the LA Times reports that Samsung is dropping its civil suit, but that the criminal case is still pending. (Funny I didn’t read about any of this in the Jungang Ilbo...)

So this leads me to recount another experience from my teenage years. I remember once I was doing the typical adolescent thing with a friend, which was complaining about my parents. I don’t remember the details, but I’m sure I wasn’t being nice. I was having a great time until my friend started agreeing with me… and adding more criticisms of his own. Huh? Suddenly my perspective changed. I immediately circled the wagons and became my parents’ best defender.

OK, so there you have it. Koreans are adolescents that don’t like their family being criticized by others even though they feel the right to criticize themselves. And their leading companies run roughshod over free speech to protect their reputation. But is this true? Is it only Koreans who would appreciate a little sensitivity to criticism, especially when some of it is rubbish from foreigners living in their country? Besides, doesn’t the UK have libel laws? Granted, the bar for libel is surely set higher in the West, but so what? Did Breen come to Korea to bring the ROK “up” to the level of his own glorious home country? What’s “up” really mean?

In fact, I’m often surprised at the level of interest we non-Koreans have in the thought processes of the “natives”. It’s certainly true for me; I never gave a moment’s notice to what makes Americans tick while I was growing up, but the day I got off the plane in Korea as a 23-year old, I felt I had something to contribute to understanding the Korean psyche.

Here’s an example of the nonsense that went through my head:

 

  • Question: Why do Koreans share so freely with me in their English free-talking classes?
  • Answer: They are glad to have momentarily escaped from oppressive Korean culture which makes them hide their true feelings. Finally, talking with me, a Westerner who doesn’t expect them to perform according to the burdensome social rules, they can relax.

Um, OK. As I see it now, the very premise of the question is flawed. But this is the expat experience and I don’t know that we ever get through it completely. I still try to figure out Koreans and there’s a category on my blog entitled “Understanding Koreans”. How far do we take it though? I was talking with someone recently who said that she thinks Koreans need foreigners to explain their psyche to them since they don’t properly understand themselves. I mentioned this to another expat later… and he agreed with HER! It’s a good thing we Westerners have such clear thinking about ourselves. After all, Socrates said, “Know thyself” but no Eastern philosopher’s ever said anything that profound, right?

I might also point out one more relevant item here. Samsung wasn’t bashful in going after Breen, but there’s a Korean who’s pretty much saying the same thing (actually far worse, and not with satire either). Former legal counsel to Samsung, Kim Yong-Chul, has published a tell-all book entitled Thinking Samsung and the story is described in this New York Times article. Samsung isn’t saying a word about this book officially; no lawsuit… Even the mainstream media in Korea isn’t touching it (though it is for sale here.) I find it interesting that Breen’s case, while not being trumpeted, hasn't been buried in Korea like the Kim Yong-Chul book story.

Anyway, as I reach the end of this post, I find it very hard to write the conclusion. Any admonition to Mr. Breen to avoid moralizing and patronizing prognostication about Korea reminds that such an exhortation would be tinged with hypocrisy. 

So here's the best I can do: In the words of Rodney King, another deep thinker whose situation in 1992 eventually lead to rioting in Koreatown in LA, "Can't we all just get along?"


My Associate Met Japanese Prime Minister Yukio Hatoyama and Explained to Him Why Dokdo Belongs to Korea

I met Professor Hosaka Yuji at the inaugural meeting of the World FTA Forum, which is the association run by Chairman Chang-Woo Lee, my former boss from LG International Corp. At that meeting, we became associates by virtue of our joint membership on the World FTA Forum operating committee. (Professor Hosaka and Chairman Lee are 4th and 5th from left, respectively, in the photo below.)

IMG_2415 Professor Hosaka is originally from Japan and currently teaches Japanese studies at Sejong University in Seoul. But what's extra remarkable about him is that he is a naturalized Korean citizen!

His decision to change nationalities came about as he studied the history of Dokdo (called "Takeshima" in Japanese), which are a couple islands in the East Sea (sometimes called the "Sea of Japan") and which are the subject of a long dispute between Korea and Japan. (A few Koreans are even taking this dispute to the billboards and newspapers of the US.)

Both countries claim ownership, but Korea has managed to occupy the islands militarily and in the course of his studies on the subject, Professor Hosaka came to accept the Korean position. He is now Director of the Dokdo Research Institute and a leading Korean advocate for Korean sovereignty of the islands.

Last Thursday's edition of the Jungang Ilbo published an article by Professor Hosaka regarding his meeting with Prime Minister Hatoyama in 2006. It is a remarkable recount of the events and I have included the Korean article and its English translation below.

-----

내가 만난 하토야마 총리

My Meeting with Prime Minister Hatoyama

4-18-2010 8-34-26 PM 나는 2006년 5월에 지인의 소개로 방한 중이던 하토야마 유키오 일본 민주당 간사장(당시)을 만났다. 독도에 대한 한국 측 논리를 일본어로 설명해 줄 사람을 찾았기 때문이다.

An acquaintance arranged for me to meet Yukio Hatoyoma when he visited Korea in May 2006. At the time, he was General Secretary of the Democratic Party of Japan and was looking for someone to explain to him in Japanese the logic of Korea's point of view regarding Dokdo.

당시의 민주당은 2005년 9월의 중의원 선거 참패로 국회의원 수가 격감한 상황이었다. 그러나 나는 일본 제1야당에도 한국 측 독도 인식을 전달하는 것이 큰 의미가 있다고 생각하고 요청에 응했다.

Having been crushed in the House of Representatives elections of September 2005, the Democratic Party of Japan had seen their numbers in the Diet fall sharply. But I agreed to the request because I saw it as a meaningful opportunity to share the perspective of Korea regarding Dokdo with the leading Japanese opposition party.

서울의 어느 호텔 음식점에서 만난 하토야마 간사장은 언론 매체를 통해서 본 것보다 훨씬 예리한 인상을 주는 인물이었다. 민주당 국회의원 2명과 비서실장, 그리고 나의 지인이 동석했다. 시간은 당초 30분을 예정했으나 그들은 내 설명을 1시간 반 정도 들었다. 그래도 시간이 충분치는 못했다. 그런데 내 설명을 듣고 나서 하토야마 간사장은 독도가 조선 땅임을 인정한 1877년의 ‘태정관 지령문’ 등을 가리키면서 역사적 사실로는 ‘일본 측 참패’, 즉 역사적으로는 독도는 한국 땅일 수 있다는 뉘앙스로 소감을 말했다. 그러나 샌프란시스코 조약에 의한 독도의 귀속 문제에 관해서는 독도를 ‘미국이 재검토하여 일본 것으로 결론을 냈을 것’이라고 강조했다. 당시는 2006년이었으므로 2008년 7월에 발견된 일본의 독도영유권을 부정하는 미 국무부 극비문서 등이 아직 알려지기 이전의 상황이었다.

I met General Secretary Hatoyama at a hotel restaurant in Seoul and he came across to me as someone much shrewder than the impression I'd gotten from seeing him in the media. He attended along with two national assemblymen from the Democratic Party, along with his office manager. I was also joined by my acquaintance. We had initially scheduled to meet for just thirty minutes but the visitors listened to my explanation for about an hour and a half. Even so, there wasn’t enough time. But after listening to my explanation, General Secretary Hatoyama pointed to, among other things, the “Tae-Jeong-Gwan Directive” of 1877 which recognized Dokdo as being Chosun [Korean] land and the historical fact of this “Japanese catastrophe”; this was a nuanced way of saying that, historically, Dokdo might be Korean land. But regarding the issue of Dokdo's jurisdiction based on the Treaty of Peace with Japan, he emphasized that “the US re-considered the matter and would have come to the conclusion that [Dokdo] belongs to Japan.” As it was 2006, the top secret documents of the US Department of State that denied Japanese sovereignty over Dokdo and which were discovered in July 2008, had not yet come to light.

4-18-2010 8-45-01 PM 하토야마 간사장은 독도의 역사적 사실에 대해서는 어느 정도 인정했지만 샌프란시스코 조약을 둘러싼 국제법적 해석에 있어서 한국 측 논리(당시), 즉 독도를 한국 땅으로 인정한 1946년의 연합국 문서가 51년에 조인된 샌프란시스코 조약에도 반영됐다는 논리를 ‘한국 측 논리일 뿐’이라고 일축했다. 이에 덧붙여 ‘나는 일본인이니까 역시 다케시마(독도의 일본명)는 일본 것이라고 생각한다’고 민족주의적 감정을 드러냈다. 그 모습에 나는 실망감을 느꼈다. 현재도 그 상황 그대로라면 하토야마 총리의 생각은 독도는 ‘역사적으로 한국 것이었을 가능성은 있지만 결과적으로 샌프란시스코 조약상 일본 것이 됐고 자신은 일본인이므로 그것을 믿는다’는 것일 수 있다.

Prime Minister Hatoyama recognized the historical facts of Dokdo to a certain degree but, regarding it as just the Korean opinion, rejected the Korean logic of the time regarding the interpretation of international law surrounding the Treaty of Peace with Japan [signed between the US and Japan] – which is that the documented position of the Allied countries of 1946 which recognized Dokdo as Korean land would have been reflected in the Treaty of Peace with Japan, which was signed in 1951. In addition, he showed ethnocentric emotion by saying, “Since I am Japanese, I think that Takeshima (the Japanese name for Dokdo) belongs to Japan.” I felt disappointed by that expression. Even if our meeting took place now, Prime Minister Hatoyama might still think, “There is a possibility that Dokdo was Korean historically but as it ended up to be Japanese in the Treaty of Peace with Japan, this is what I believe because I am Japanese.”

그런데 그 후 새로운 자료가 발견됐고 한국 측 논리는 크게 발전됐다. 하토야마 총리가 현재의 샌프란시스코 조약에 관한 한국 측 해석을 들으면 개인적으로 생각을 좀 더 수정할 가능성이 있다고 본다. 그는 지난해 12월에는 고등학교 사회과 교재 해설서에서 ‘다케시마(독도)는 일본 땅’이라는 직접적 표현을 삭제하는 데 결정적 역할을 했다. 그러나 최근 기자들의 질문 공세에 밀려 독도에 대한 ‘일본 정부의 방침을 바꿀 생각이 전혀 없다’는 견해를 밝혔다. 그러나 그 자리에서도 그는 ‘독도는 일본 땅’이라는 표현만은 피했고, 외상도 “한국이 (독도를) 불법점거하고 있다는 표현은 쓰고 싶지 않다”고 말했다. 지지율이 계속 하락하고 있는 현 상황에서 7월의 참의원선거를 앞에 두고 민주당에 불리한 발언은 피해야 하는 입장에서 불가피한 선택이었을지 모르나 내 고교와 대학교선배이기도 한 그가 민족주의적 감정을 극복하고 아시아를 크게 품었으면 하는 마음이 간절하다.

But since then, new materials have been discovered and the Korean position has advanced greatly. If Prime Minister Hatoyama were to listen to the current Korean interpretation regarding the Treaty of Peace with Japan, I think he might revise his personal thoughts on it a bit more. Last December in a position paper regarding the social studies curriculum in Japanese high schools, he took a decisive role in having the direct expression deleted which said, “Takeshima (Dokdo) is Japanese land.” Recently, having been pressured under questioning by journalists, he expressed this position: “There is no consideration being made to change the Japanese government’s guidelines” regarding Dokdo. But even as he said that, he still avoided using the expression “Dokdo is Japanese land” and the foreign minister has also said, “[We] don’t want to use the expression that Korea is illegally occupying [Dokdo]”. Currently, as Prime Minister Hatoyama's support is continuing to fall and with the House of Councillors elections coming up in July, it may be an inevitable choice to avoid expressions which are disadvantageous to the Democratic Party of Japan. But he is also my senior alumni from both high school and university and I have a strong hope that he will overcome his ethnocentric bias and embrace the Asian perspective.


The "Great Train eXpress" Sounds to Me Like Something Out of the "Old West"

Korea's a small country, but sometimes it feels much larger than it is because of the traffic issues.Things have been getting better -- much better! -- fast, though. 

In fact, the first national highway from Seoul to Busan (approximately the same distance as Dallas to Houston, or NYC to Washington, DC) was only finished about thirty years ago. Now, the country is covered in highways and, especially once you get outside the major cities, travel is fast and comfortable.

6a011279704a5b28a401347fdcdf94970c Even within the Seoul metropolitan area, the traffic is improving. When I got to Korea in 1994, I remember that just taking the 15 mile trip from Ansan to Suweon was a painful 1-2 hours on the weekend; today, it seldom takes more 20 minutes.

The Seoul subway system boasts something like 300+ stations now, and is growing continuously. It's been connected to various satellite cities (which mostly means Gyeonggi province) for a long-time but the lines are continuously being extended much deeper into the province. Still, travel times are relatively long. For example, from my office here in Ansan, the subway takes about 40 minutes to reach the outskirts of southern Seoul.

And KTX, the Korean high-speed rail system, is growing rapidly too, with 2nd generation carriage upgrades being introduced in stages, taking riders from one end of the country to the other. (Though, the only boarding point in GyeongGi province is at Gwangmyeong station, which is not convenient to get to from just about anywhere.)

Now, the Korean government is introducing a brand new public transport network that promises to take riders quickly from various points in Gyeonggi province into Seoul and back out again at speeds reaching 200km/hr. It's called GTX, which stands for "Great Train eXpress". If it really does begin service on schedule in 2016, our current two-hour trip from Ansan to Euijeongbu will be more than cut in half. Most of the travel time will be spent just getting to Geumjeong station, the nearest junction to us. 

I am surprised that there is very little English information on the Net about this. The official site at gtx.go.kr doesn't have an English version. I found an official (Korean) blog called "Mr. GTX" (http://blog.naver.com/whorse54/70070822301) but the last post was three months ago.

However, I did find this English-language promotional video! It appears to be several videos combined into one, so there's a lot of repetition, but here it is nevertheless:

In addition, here is a TV report posted yesterday which is about the interfacing of GTX with another rail project in Yongil. Click the photo to view the Korean language video in a separate window. I have provided the English translation of the report below, but the original article is here.

4-14-2010 1-51-02 AM
 

[Anchor] Last April, Gyeonggi Province proposed GTX, a rapid rail transit system for the metropolitan area, as a means of resolving the serious traffic problems in and strengthening competitiveness of the Seoul region. It's already been one year since the GTX announcement. Let's take a look at the work going on in Gyeonggi Province to link the transportation networks and achieve efficient GTX construction.

[Reporter] With the opening scheduled for the end of June, trial testing is underway on the Yongin city light rail line.

Running a total of 18.1km from Giheung to Everland, the Yongin light rail line is designed to accomodate up to 226 people in one carriage.

The Yongin light rail line connects with Giheung station on the extended section of the Bundang line, which is currently under construction. Riders will be able to transfer here and it is expected that this will make both Seoul and the Suweon area more accessible. 

Gyeonggi province is currently working on GTX, the rapid rail system for the metropolitan area, and is considering a plan to link the Yongin light rail line to the Dongtan-Samseong section of the GTX system, one line of which runs through Yongin.

[Interview] Gyeonggi Province Green Railway Division Head Sang-Gyo Seo says, "We are looking into extending the light rail so that it can connect with GTX.

Exactly one year ago, Gyeonggi province proposed GTX as a revolutionary means of solving traffic problems in the metropolitan area.

Running at 40m underground at speeds up to 200km/hr, GTX was proposed as a revolutionary transportation network that connects all areas of Seoul and Gyeonggi Province within a 30-minute travel time.

To achieve effective operations of GTX, and even as it promotes the early opening of the extended portion of the Bundang line, Gyeonggi Province is actively working to build a traffic network that connects with the light rail line.

©G News Plus News | Eun-Hee Choi cheny@gg.go.kr

Date/time : 2010.04.13 16:19


A Summary of Dr. Victor Cha's Interview on Korea Business Central

The Korea Business Interview Series continues at Korea Business Central (KoreaBusinessCentral.com). 

The latest interview was held with Dr. Victor Cha, former Director for Asian Affairs in the White House's National Security Council and current Director of the Asian Studies Program at Georgetown University. Dr. Cha is author of Beyond the Final Score: The Politics of Sport in Asia.

Here is the link to the interview audio:

In addition, the discussion and transcript can be found on Korea Business Central at the following link: http://www.koreabusinesscentral.com/forum/topics/korea-business-central-3

(The full list of interviews can be found here: http://www.koreabusinesscentral.com/page/interviews-2)

Main points of the interview:

Topic #1 - KORUS and the Korean Economy

  1. The Korean economy is improving thanks to the current Korean government's expansionary fiscal policy, which sets the administration up for good results in the June local elections.
  2. The Korea-US Free Trade Agreement (KORUS) will lead to increased economic activity in both the US and Korea. 
  3. The Obama administration is starting to say the right things about trade and passage of KORUS will ultimately depend on a big push by the White House.
  4. In addition to being the largest bilateral free trade agreement negotiated by the US, KORUS is also important in terms of the template it offers for future free trade agreements.
  5. It is unlikely that the US Congress will do anything on KORUS until after the US mid-term elections in November.
  6. The main sticking points to passage of KORUS by the US Congress include trade terms for beef and automobiles. These will likely be dealt with through side agreements, rather than renegotiation of the main agreement text
  7. Passage of KORUS is expected to benefit US automakers, citrus growers and various service industries, among others.

Topic #2 - Economic Engagement Between South and North Korea

  • North Korea is not taking up the Lee Myung-Bak government's "3,000 Proposal", which promises North Korea a per-capital income of $3,000/year within ten years if North Korea will denuclearize and improve its human rights record with South Korea. Therefore, economic engagement between North and South Korea has gone into reverse under the current administration.

Topic #3 - Sports Diplomacy in Asia

  1. Dr. Cha's idea for his book Beyond the Final Score: The Politics of Sport in Asia came after seeing the newsworthiness of sports on a visit to Australia with US Secretary of State Condoleezza Rice.
  2. The seminal case of sports diplomacy was "ping-pong diplomacy" which lead to China's opening to the United States in the 1970s.
  3. Since then, Korea has been very successful in promoting diplomatic initiatives through sports, such as the Seoul Summer Olympics in 1988, where Korea's efforts eventually led to the normalization of relations between the Soviet Union and South Korea in 1990.
  4. Korean success in the recent Vancouver Winter Olympics positions Korea well to host a future Winter Olympics in Korea.

Toyota's Despicable Contempt for Korean Consumers

The Koreans are thrilled silly about the Toyota quality problems. They're trying not to gloat but their glee is barely concealed, especially as Hyundai and Kia auto sales increase so rapidly in the US. But this isn't really what my post is about today and I'm going to depart a bit from my normally Korea-friendly perspective.

3-3-2010 8-52-44 PM In an editorial in the Jungang Daily yesterday (유교가 '아시아의 세기' 감당할까), columnist Hwan-Yeong Kim (in photo at left) talked about the way Toyota is apologizing for their quality problems. Apparently the president of Toyota showed up at a press conference with American journalists and only bowed 70-degrees when he apologized the first time. He then had to come back and do it again at 90-degrees. But when he got to China, he bowed 90-degrees the first time. And it seems he hasn't bothered to show up in Korea to apologize at all.

So Mr. Kim is irked that Japan's paying so much attention to keeping the Chinese happy but is ignoring the Koreans. He backs this up by pointing out that when Toyota started selling their Lexus models in Korea, they sold at higher prices here than anywhere else in the world and that this showed contempt for the Korean consumer.

But just today, the Jungang Daily ran another article with this title: "Why do Automobiles for Export Have Safety Devices but the Ones for Domestic Consumption Do Not?" (수출 차엔 기본인 안전장치, 내수 차엔 없다?). Apparently the Korean car makers are willing to outfit their cars with less value for Korean consumers than they are in overseas markets. 

Or how about this? When Hyundai first sold its Genesis model in the US, the prices were so much lower there than in Korea, people were buying the car in the US, importing it back to Korea and still saving money. In early 2008, we bought our Kia Pride (called a "Kia Rio" in the US) in Korea for much more than it would have cost back home.

My point, of course, is to ask whether anybody could blame Toyota for selling their cars expensively in Korea when the Korean car makers themselves are doing the same thing. Rather than moan and groan about being slighted by the Japanese, perhaps it would be more appropriate to ask what can be done to create a more consumer-friendly car market in Korea.

And BTW, I sure hope the Korean makers are prepared for the day that the US media and Congress, goaded on by the US automakers, decide to turn some quality issues into another "perfect storm" of a media circus.