South Korea’s Spectacular Rise to An Economic Powerhouse
Exam- Please write more own thoughts
1. South Korea is famous for its spectacular rise from one of the poorest countries in the world to a developed, high income country in just one generation. In about 200 words, can you summarize the three major factors of why Korea is so successful? 15 points2. Sony, once the king of the hill in consumer electronics, has been handily eclipsed by Samsung. Samsung grew from a simple grocery store to tech titans, and this state of affairs is reflected in millions of global consumers’ household electronics devices. Sony's market value is now one-ninth that of Samsung Electronics. What happened? Why did Samsung become successful? Can you summarize the three major factors of why Samsung is so successful? (15 points totals. 150 words)3. India is now a top IT outsourcing destination for many large corporations in the West. It is an example of the growth of a knowledge industry in a largely poor, developing country. In about 200 words, can you summarize three major factors of why India is successful in IT Outsourcing? (15 points)4. In the late 1980’s, the rapid rising cost in Taiwan had started to drive investments to lower wage countries. Fortunately, Taiwan has advantages (political, cultural, economic) that Japan did not have 20 years ago. In about 200 words, please explain Taiwan’s policies that kept its economy growing rapidly after 1979. (15 points)5. In 1980, China established Special Economic Zones (SEZ). China’s Special Economic Zones were significant in building the global powerhouse China is of today. Please answer the following QUESTIONS: (100 words each) (15 points)a. What did “Reform and Opening” do for the Chinese economy? b. Describe what is a Special Economic Zone? c. How does Special Economic zone help the growth of China, especially in the 1990’s? 6. By welcoming foreign direct investment (FDI), China’s open-door policy has added power to its economic transformation. Please answer the following QUESTIONS: (100 words each) (15 points total)a. How did the encouragement of foreign direct investment specifically in manufacturing helped China’s growth?b. How did China solve the labor shortage problem in these Special Economic Zones?c. What did China do to improve the investment climate for the private sectors?7. “China’s economy is at a significant crossroads after 2012, it has come to the end of the export focused industrial model of development.” In about 150 words, will you explain this statement and give examples of the status of China’s economic development? (15 points)
Starbucks Has an Eye-Popping New China Plan: Open a Store Every 15 Hours For 4 Years. In about 150 words, can you tell us why Starbucks is successful in China? (Please use references from WSJ, NYTimes, SCMP, etc) (15 points)9. US China “Decoupling” is Washington’s new foreign policy buzzword: For the White House, the phrase is shorthand for the administration’s commitment, through taxes, tariffs, and other incentives, to disentangle its companies and their technologies from China’s supply chains. Yet, American companies that produce, import, or exports from China are caught in US China Trade War crossfire. The deepening economic rivalry creates a headache for multinational companies that have spent decades constructing global supply chains and building market share in China. In your own words, can you comment on these ongoing trade issues between US and China? (150 words) (15 points)10. Academics and policymakers have debated the appropriate role of public policy in developing economies. Most of the East Asian growth is attributable to seemingly miraculous achievement in the high performing Asian economies: Japan, Hong Kong, the Republic of Korea, Singapore, and later, China. The growth in some of the East Asian economies has raised complex and controversial questions concerning the relationship between government, the private sector, and the market. (15 points)In about 150 words, please describe what you have learned from studying these East Asian successes? Do you think this is a sustainable model for the rest of the developing world?Reference: Lessons from the East Asian Development Model, John Julian 2014https://www.strategy-business.com/blog/Lessons-from-the-East-Asian-Development-Model
Additionally, policy reforms opened the nation’s doors to foreign markets. Consequently, the country’s economic growth became more export-led. Initially, products such as footwear and garments were the primary export items, but later, consumer electronics, steel, and automotive became the nation’s leading exports. South Korea strengthened its international and internal collaborative bonds as it continued conducting trade on an international scale.
Finally, South Korea established an environment that encouraged innovation and investment. Through its national R&D program, the country has been able to export competitive products, evidenced by companies such as Samsung. Even today, the nation is still expanding its innovative efforts to nuclear energy, AI & ML, Space, and Biotech, among others. Moreover, policy reforms have made it easier for domestic and foreign investors to run enterprises.
2 Samsung’s success began with the change in its leadership in 1987 and the “new management initiative” of 1993 that came with Kun-Hee Lee’s takeover as chairman after his father’s passing. The initiative focused on retaining the company’s competencies in production and manufacturing while refining R&D, design, and marketing. Essentially, this new initiative encompasses the entire strategy that the company took in its emergence as a leader in consumer electronics
Innovation through research and development is key to why Samsung succeeded in surpassing Sony. Samsung was among the first tech companies to transition into LCDs which were popular with the consumers at the time, while its competitor Sony lagged with cathode-ray displays. Additionally, the company has led in improving its design through its various design centers and hiring the best designers in the industry. Through innovation, Samsung has improved the quality and design of its products. Coupled with its pricing, it improved its brand value.
Samsung Electronics ramped up its marketing campaigns over the years to stay ahead of its competitors. For example, it sponsored the Olympic Games and the World Cup in 2002 and placed its products in the movie sequel ‘the Matrix,’ among other marketing campaigns. These efforts were rewarded as the company witnessed increased net margins, market share, and brand value, surpassing its competitors like Sony.
3 The concerted efforts of the Indian government have been instrumental in the nation’s position as an IT outsourcing hub today. The IT sector in India enjoys a more liberal policy framework around taxation and investments. Examples include the exemption of secured income tax from profits of software exports, among other exemptions, nil rates, and tax holidays. Additionally, the Indian government amended its copyright laws. Such a business environment encouraged foreign investment and encouraged overall growth.
India’s investment in education enables it to offer a large talent pool for the IT/ITeS industry. About 100M in India speaks English, with over 3M in direct IT outsourcing. Over 200,000 engineering students graduate annually. Thus, India’s diverse skill base extends beyond IT and has gradually been outsourced to other sectors, such as finance, retail, and healthcare.
India offers a cost-value proposition for corporations seeking to reduce production costs. Most corporations prefer India for IT outsourcing because it has alternative talent pools that are inexpensive compared to other countries offering similar services. Companies enjoy flexibility and productivity with these two factors; cost and value. As a result, individuals, corporations, or enterprises that outsource labor from India can deliver excellence and quality products at a lower cost.
4 Taiwan’s economic policy after 1979 has focused on ‘liberalization’ and ‘internationalization.’ Through liberalization, the policy has emphasized reducing government regulation and controls while slowly eliminating state subsidies to manufacturers. Liberalization also meant that state-owned businesses could be privatized because of their inefficiency and unprofitability compared to private enterprises. Liberalization also meant privatizing commercial and special-purpose banks to promote a capital industry. Consequently, the dominance of ownership by the government was also broken. An excellent example of an economic liberalization policy is the SOE Privatization Act of 1991.
On the other hand, through internationalization, Taiwan opened its doors to foreign markets and investors without unjustifiable restrictions. Such an environment encouraged foreign investment, including the outflow of capital to developed nations and direct investments in developing countries. Moreover, the internationalization aspect of Taiwan’s economic policy also facilitated the exportation of various products and the acquisition of cheap labor because, during this period, the labor cost had increased in Taiwan. By opening its doors to foreign markets, Taiwan also increased investment in developing countries in textile, electronics & electrical, rubber, and plastic.
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1 The ‘Reform and Opening’ policy has been at the core of China’s increased foreign direct investment and the introduction of private enterprises. Before its inception, the private sector had a minimal footprint. The private sector contributes about 70% of the nation’s Gross Domestic Product today. The policy has also opened up both rural and urban life in the country, which has immensely adjusted ownership structures and involved more people in the reform agenda. This openness on both a local and international scale allowed free circulation of products and gave the market the freedom to determine the price of products. This freedom further expanded beyond trade to industries such as technology. Overall, people’s living standards improved, the GDP increased, China opened up to foreign markets, and there were more investments.
2 Essentially, China’s SEZs are areas within the country’s national borders with different trade and business laws from the rest of the country. In China, they vary in scope and function. Common examples in China include corporate SEZs (industrial parks belonging to corporations with their supply and market chains), industry clusters (support the development of specific industries), local industrial parks (the local government designates them), and geographical areas (based on geographical resources). A real-life example of an SEZ in China is Hainan Island, along the Pudong area, established as an SEZ in 1988. SEZs help attract investment, effective administration, and trade balance, among other benefits.
3 China’s economic growth in the 1990s presented the challenge of capacity to maximize new opportunities. As a result, the Government of China created a Special Economic Zone (the China-Singapore Cooperation Park) so that the country may be able to take advantage of the new opportunities. After the ‘90s, these zones have been instrumental in stimulating development b...