“With the success of China’s economic development and especially the rise of Shanghai, Korea is now sending its government officials to China in order to research how they have successfully managed to attract the FDI they are getting these days. In a way, it’s a little humiliating for Korea to be in this position”

I’m no economist, but China’s competitive advantages over Korea could be summed up in two phrases: cheap labor and lax environmental protection. Even China is being priced and regulated out of the manufacturing business as more Chinese and foreign factories relocate south to Vietnam.

I could be wrong, but the title of that article seems misleading. Lecturing? I don’t know…

1) Security guaranteed. Can investment be attracted, talented people retained, and the future generation educated without it?
2) Stable government that didn’t plunder all the wealth. Yes, Park’s was an iron-fisted rule, and yes, most were compelled to persevere, yet meaningful investments were made.
3) Absence of natural resources. Many Koreans cite its lack of natural resources as a curse; it’s a blessing.
4) Working women. Korea’s industrial revolution was stitched together by their dexterous fingers. Letting them out of the house and keeping them in the factories kept them out of the maternity wards.
5) Birth-rate reduction. For families to go from 8-10 kids to 1-2 kids in a generation or two is a miracle.
6) Emasculated boogeyman. Using Japan as a role model whilst demonizing it to spur sacrifice for economic development may seem hypocritical, but it’s good to have a boogeyman that stays in the closet. It’s a “threat” without the expense of an arms race. Even better when the boogeyman provides investment and technology.
7) A traditional people who embraced modernization. Enough can’t be said.
Retain the educated. Whether for Japan’s sole benefit or not, many were educated during the colonial era, and those who survived the Korean War had skills. And most didn’t/couldn’t leave the country.
9) Restrict unnecessary spending and encourage savings. From banning consumer imports to restricting overseas travel the money stayed in the country and, when not in the bank, was spent on domestically made goods.
10) Profit from someone else’s far-away war.
11) Rich and generous friends. You gotta be able to sell the stuff you make. Also good when they take in many of your lower-educated people.
12) Take advantage of bad choices. When others are embracing socialism, nationalizing businesses, driving their talented citizens overseas, or just making crappy products it betters your competitive advantage.
13) Respect property rights, but not the intellectual kind.

But as for Korea’s economic “success”, I found that to be ironic in a way. My boss is a well-known economist whose resume in the field gives him a lot of credibility whenever he comments on such issues. But one thing he said which I will never forget was this and it was in regards to China although it is the broader issue I am more concerned about. He once said to me:

“There was a time when the Chinese government started sending all these officials to Korea to study our economic success and to benchmark how we were able to build ourselves up so quickly following war. But these days it is now the opposite. With the success of China’s economic development and especially the rise of Shanghai, Korea is now sending its government officials to China in order to research how they have successfully managed to attract the FDI they are getting these days. In a way, it’s a little humiliating for Korea to be in this position.”

Not too sure if Chiang Kai Shek was also a dictator. I would guess he was. Then, Taiwan counts and so does the current PRC.

No thanks to the Russians for spreading death, wars, and economic set backs for half a century in every part of the globe they touched.