The International Fame of Korea's White Elephants
Agence France-Presse recently released a selection of "wild and wonderful news items" from 2007, including one about a local airport in South Korea. It said, "A town in South Korea which spent some US$140 million to build its own airport was then forced to admit that no airlines actually wanted to fly there."
The "zany airport" in the report is Uljin Airport in North Gyeongsang Province, which has not yet opened. Uljin Airport was originally scheduled to open in 2003 but operations have been delayed since no airlines want to fly there, as AFP correctly reported. The airlines know that very few passengers would want to fly there.
Uljin Airport isn't the only local airport in Korea that can't attract airlines. Daegu Airport has had no flights since November when airlines decided not to fly there. Yangyang Airport in Gangwon Province handled an average of just 66 passengers per day in July, the peak summer vacation season. That's fewer than the number of people employed to run the place -- 82. Muan International Airport in South Jeolla Province, which opened in November, averages just one domestic and one international flight per day.
Local airports in South Korea have become a global laughingstock because they were built by political rather than market logic. In addition, a new transport network including the launch of the KTX bullet train and the construction of new highways has made it possible for travelers to reach once remote destinations much more easily. All this makes many local airports a source of public scorn instead of pride.
Local airports are not the only public facilities that have squandered time and money for the sake of politics. The central government will have to pay W318.6 billion (US$1=W940) to private builders in 2008 to compensate for its wrong market predictions for the construction of the Cheonan-Nonsan Expressway, and the Incheon International Airport Highway and Railroad. We are worried that foreign news agencies might learn about these boondoggles and include them in their selection of "wild and wonderful" news items from 2008.
This column was contributed by Kim Jae-gon, from the Chosun Ilbo's National News Desk.
Canadian SME International Trade and Marketing - writings upon readings and continued curiousity in the realms of cross cultural business. Some of my opinions are not my own, but I would fancy to say nearly all of them should be credited to the various authors. Deming disciple. I stubbornly persist.
Monday, December 31, 2007
Thursday, December 27, 2007
Part Two Review: The Geography of Thought
Part Two Review: The Geography of Thought
What's happening? Thursday morning I found out I was moving on Friday morning. Really couldn't believe it nobody told me when they knew on Monday! Anyway in the middle of marking and felt like what the hell is going on why now? Anyway the owner wanted to move back in (breaking the rental contract - pretty common here). So rushed with the housing coordinator to find an apartment which didn't take long. So moving and packing all Thursday night and then an express moving service crew arrived Friday morning at 7:00 and it was sleet and freezing rain out. But by nine o'clock they had me on my way to my new place just five minutes walk away.
The crew had a super fast delivery elevator ladder truck that runs the stuff up to the patio window like a rocket ship and I just sat and pointed where things should go. Was pretty wrecked on Friday falling asleep around noon and waking up at nine pm then going to back to bed around 11:00 pm and getting up Saturday around 7:00 am. It was a whirlwind. So I didn't put in any marking on Saturday and cancelled an evening out in Seoul with a friend recently returned from Australia. She is Korean but seemed pissed that I didn't have enough umph left to run down the two hours on bus and subway to go out for the evening anyway.
Sunday had a meeting at the Korea Herald building with the editor Matt Lamers from Canada and a collection of Korea's best foreign bloggers and writers (Zen Kimchi, Marmot, EFL Geek, Gypsy Scholar, wow they were all there). He invited me to contribute a column on Expat Finance after reading my blog. Anyway it is a thrill to be considered one of the best English writers in Korea and it will be good for my exposure level here anyway. The meeting was cool because with literate people, writers anyway, no topic seems too outlandish and intellectual curiousity seems pretty high at a table like that.
Yesterday I finished marking and dropped off some wine and green tea to my secretary and my boss who is polishing a paper for a conference in China on January 2nd. Got a call from an Australian lady I work with named Pauline and I invited her over to see the new place and go out for dinner. Was waiting for a gas range hose installation so that I can actually cook but nobody showed up when they told me. We went into Pocheon proper (we live ten minutes out) to a restaurant I found the first night I came here in 2006 - a beef ribs BBQ place and we had a little feast. The last time we went was my birthday and this time they put out extra whole raw oysters and marinaded green crabs. Luckily Pauline doesn't like spicy food so I had all those crab legs to my lonesome. I took the bones and gave them to neighbourhood dogs.
Pauline went to church this morning but I slept in and then for dinner I prepared an olive oil and red wine salad with smoked quail's eggs, nachos and herb cheese in the rice cooker (what haven't I cooked in there yet?), smoked Atlantic salmon with diced green onions, sliced calamata olives and garam masala on Carr's cracked pepper crackers, cold cajun fried chicken from GS Supermarket in Pocheon (purchased the night before) with various wines including Argentina Bodega Privada Cabernet Sauvignon, J.P.Chenet white medium sweet, Gran Reserva Torre Maria Vanecia Bodega Enguera 1999 (in the salad), a young white Spanish Valhondo, and last night with Spanish cured salami some Casillero del Diablo Cabernet from Concha Y Toro which the Koreans don't seem to like and for which I got 25% discounts at Samsung-TESCO Homeplus Supermarket.
Dinner was finished with green tea from Hadong a private stock reserved for Buddhist temples of which a small canister costs about seventy-five dollars and powdered oiled chesnut robed rice cakes which have become one of my favourite desserts.
This is all a nod to the Chinese philosophy of the world not having any logic whatsoever or empiricial nature having few comparative qualities as defined by the Greeks. Nisbett defines the differences between the two as a contrast in defining the nature of things. Greeks according to Nisbett took great pains to identify attributes and categorisations of abstract qualities, discrete objects having distinctive limits which together form construction of patterns and rules and accordances to those observable variables. Nisbett describes how Greek logic once born can be made fairly irrelevant through excessive contradictory logic at odds with being, changing, or otherwise flawed reasoning through slavery to either-or and linear logic as described by Robert Logan.
His description of Chinese logic starts with duality of change and the contradictions in affairs which can provide benefits and pitfalls in expression of fortune, life's lessons, and wisdom similar to the philosphy of the yin and yang of all things and events. Such theories on life's teaching have a basis in Confucian, Taoist and spirit in all its changeable essences. For there to be truth there is fallacy, for there to be good there is evil, for there to be fortune is to be misfortune. In its blending with Buddhism these thoughts on the nature of things tends towards the prospect of resonance or that everything is connected and that nothing especially logic is at all concrete. In such a world view the interconnections and influences between things are more important than their respective categories.
Thus there is no surprise that cultural studies plot American versus Korean culture very much as two halves of the same coin or two opposites in terms of yin and yang.
The basis of much of each cultural framework is the apogee of each highly contrasted philosophy.
Wednesday, December 26, 2007
Canadian jazz great Oscar Peterson dies
(Nathan Denette/Canadian Press)Canadian jazz great Oscar Peterson dies
CBC News
Jazz fans and Canadians both home and abroad are mourning the death of Oscar Peterson, the virtuoso known globally as one of the most talented musicians ever to play jazz piano.
Peterson died Sunday night at his home in Mississauga, Ont., from kidney failure. He was 82.
In August 2005, Canada Post paid tribute to Oscar Peterson on his 80th birthday by issuing a postage stamp in his honour. "The world has lost the world's greatest jazz player," Hazel McCallion, mayor of Mississauga and Peterson's friend, told CBC News on Monday afternoon.
Renowned for his speed and virtuosity as a pianist, Peterson — who was born in Montreal and later made Toronto his home — made hundreds of recordings in his career, even after a stroke in 1993 disabled his left hand.
Oscar Peterson - You Look Good To Me
Monday, December 24, 2007
Review One: The Geography of Thought
Review One: The Geography of Thought
How Asians and Westerners Think Differently...and Why
Richard E. Nisbett
This book was recommended to me sometime ago, long enough ago to forget who recommended it. It reads quickly and easily something most people might not associate with books on comparative social behavioural psychology. Perhaps insane people over analyze psychological differences between cultures however giving some framework to the differences an expatriate from the west encounters in any long-term stay in Asia is if anything to be highly appreciated and Nisbett covers the territory or sketches the major general differences in attitudes, perspectives, and attributions theories in an objective manner, highlighting the differences and making a strong case for the combined benefits of learning about one cultural mindset versus another.
This reading has been punctuated by a visit from an evangelical Bible thumping Christian who claims my Catholic sentiments and my curiosity regarding world religions is somewhat obtuse as in his mind there is no God but the One True God. At the same time I am reminded of various incidents in my life here in Korea and elsewhere where I have felt my values are not in tune with those stranger and friends around me Asian or Western alike. However listening to CBC Radio as I am attuned to do at times especially marking during exam weeks I caught a special program on the benefits of reading especially when seeking a moral lesson. I do seek moral lessons and find them at times in The Bible, at other times in other great books. The program describes the hypothetical extension of the messages we find in stories, parables, readings and the imaginative world one may create in one’s own mind to exercise the hypothesis read about. To practice the mind’s extensions into the stories and settings which often effects realizations and learnings of an intrinsic value in effect perhaps a reshaping or remoulding of self-image, self-expression, and self-searching.
It is easy to participate in such activities when one has the time to reflect on challenges such as existing as an expatriate with some degree of self-reliance and questioning the actions, thoughts and patterns of behaviour of others particularly when these do not coincide one’s own concepts of fairness, rightness, or understanding. Nisbett begins with a contrastive and comparative description of the ancient philosophical differences between Greek critical discourse and Chinese moral codes of Confucianism a set of standards most Koreans know well. While there are similarities there are also differences.
Freedom of movement was a practice of Ancient Greece according to Nisbett and an embodiment of liberty described as personal agency or the freedom to act and choose one’s path in life as one sees fit or that one’s actions determine one’s rewards or the fruit of labour. Such values consider few constraints are necessary in the development of a member of community with an individualistic purpose illustrated in the Greek sagas of the Iliad and the Odyssey. Even in the act of oral traditional recitation prior to actual written books on these folk tales indicates the freedom and creativity to tell the story in one’s own peculiar way, with some variations feely expected as there was no written scripts prior to the eighth or ninth centuries BC the degrees of freedom for story-tellers were then quite expansive as compared to any time since written texts became standard. Differences fueled argument, debate, and exchange of ideas and enriched a community fulfilling a curiosity and desire to learn and know as a result of one’s efforts to do so with a reward being innovative new ideas.
At roughly the same time Ancient Chinese festivities are described as being opportunities not to explore and discover new places and new ideas but to return to family ancestral homes, relatives, and close friends with a contrastive emphasis on the harmonious interactions within the family unit which could be quite large and comprised of several generations. I am reminded of the sizes of the first Europeans and their tiny door frames in Louisburg, Nova Scotia where the French held a major bastion in North America. The quality of life in a family tightly compacted within four tiny walls will greatly benefit from harmony if they can get it. Isolation perhaps seen as contemplative necessity among the Greeks is shunned in traditional Chinese history as Nisbett describes an Ancient Chinese character is considered an identity only in its interwoven interknit connections within a collective or family association. In this difference the power of a group’s agency or influence upon its interactions in a community of groups rather than an individual defines the difference in perspective also noted by Kluckhohn in his personality studies among the Navaho and others in the USA in the 1920s and 1930s.
It appears these differences remain alive and well in the modern worlds where East meets West and vice versa.
Saturday, December 22, 2007
Priority Regions Get Boost in Trade Officials
Priority Regions Get Boost in Trade Officials at Expense of Old Allies
(Embassy) (With Costello Comments)
The government has slashed its trade commissioner ranks in Europe over the past two years, while bolstering its presence in key Latin American and Asian countries, as well as the United States, Embassy has discovered.
The results have garnered mixed reactions from various corners, though respondents overwhelming agreed that Canada is not devoting sufficient resources to its trade and investment promotion efforts abroad. "For me, it is reflective of the bigger picture," Liberal Trade critic Navdeep Bains said Monday, "which is that they cut the funding overall for the department, which means they are really stretched for resources."
For example Nova Scotia and other smaller provinces are seeing a movement towards local produce to support local farming. At the same time this localized type of consumption pattern should stimulate local/global marketing efforts to sell those spare pigs, chickens, and organic materials to emerging countries like Korea with many specialized however small "well-being" type shops.
In the fall of 2005 and 2006, the Department of Foreign Affairs and International Trade compiled for Canadian and international businesses a book containing a list of all trade commissioners posted in Canada and in Canadian missions abroad. The list included the name, title, contact details and area of expertise for each official, including heads of mission involved in trade or investment promotion, trade commissioner assistants and provincial trade representatives. The government has not prepared a similar handbook this year, but does have the most up-to-date information available on its Virtual Trade Commissioner website in the same format.
This virtual trade commissioner website removed my password without notification and upon enquiry I was told by Ingeborg Henn, "because you represent a foreign company you are not eligible for a Virtual Trade Commissioner. We appreciate your understanding in this matter." I wrote a reply asking for consideration and the control and flow of information as it stands at DFAIT left my reply unanswered.
Embassy compiled the lists last week, deciding to use statistics from 2005 to compare to this year because it has only been in the last year that the government has closed four missions abroad and clearly stated its international goals and priorities. According to the listing, the number of trade commissioners Canada has sent abroad increased by 20 from two years ago, up to 932.
Asia as a whole hosted more Canadian trade commissioners than any other region, and saw the largest increase over the past two years, with 18 more added. The country that registered the largest increase was China. Fifteen more were added to the ranks, resulting in the presence of 72 trade commissioners working on the ground.
China has been identified as a priority for the Canadian government as part of its emerging economies strategy. A number of other Asian countries, notably the Philippines and Malaysia, also saw notable increases as the government also focused on Southeast Asia.
Surprisingly, however, is that Canada increased its trade commissioner presence in India by only three to 31, though that increase actually occurred last year. India has also been lumped in with China as a priority.
Perhaps unsurprisingly, the government also increased the Canadian presence in Latin America, adding nine new trade commissioners to the region, including five to Colombia. The Conservative government has come under fire for standing by Colombia's government and promoting an agenda of free trade at a time when the country is still plagued by countless human rights violations, government corruption and the continued paramilitary presence.
Brazil, on the other hand, which has been identified as the region's major economy, saw no change over the past two years, nor did Peru, which the government has also touted as an important element of its Americas strategy.
Despite repeated statements from International Trade Minister David Emerson that Canada needs to diversify its trade portfolio away from the United States, especially given the current economic climate, Canada has devoted nine new trade commissioners to enhancing Canada's largest trading relationship.
Mexico, however, saw no change from two years ago. Four trade commissioners that had been added last year were gone by this year, even though Canada has said it wants to drum up relations with the other NAFTA nation.
Reductions Hit Europe Hardest
In March, the government closed four missions abroad with little advance notice. The consulates-general in St. Petersburg and Milan both economic hubs within Europe, as well as the consulates in Osaka and Fukuoka, Japan, were shuttered. The end result, it is now clear, was a significant reduction in presence in each of those countries. Canada scaled back the number of trade commissioners it has posted in Russia over the past year from 11 to nine, while four were moved out of Japan, leaving 34.
Italy, however, was the hardest hit of all countries in the world, down from 20 trade commissioners two years ago to nine as of last week. Europe as a whole suffered from the reshuffling, losing 15 commissioners over the past two years.
Italian Ambassador to Canada Gabriele Sardo said he was not surprised that his country had lost the largest number of Canadian trade commissioners, or that the government is moving away from Europe. "This can only point to one very simple fact," he said, "that Canada is losing interest in keeping a close look at what happens inside Europe, but rather is focussing on other parts of the world, which we already knew."
Mr. Sardo said many countries are ramping up resources to engage India and China, but would not comment on whether it was a good strategy. "Everyone talks about catching up," he said. "Maybe so much catch up is not necessary, but maybe it is certainly necessary."
In explaining the changes, International Trade spokeswoman Valerie Noftle said in an email that the department "needs to ensure that we are at the right place with the right people and doing the right thing."
"Fundamentally it is about finding more efficient ways to work in support of the government's foreign policy and international trade priorities," she added. "Staffing strategies are developed in terms of recruitment and retention, so that our work force can play a key role in advancing Canada's international agenda."
Funny that my applications to DFAIT for twelve years have gone unanswered.
The department is planning to "better align" its resources in support of the government's foreign and trade policy priorities, Ms. Noftle said. "Like other departments, our annual business plan requires us to examine where our resources are and re-calibrate to respond to emerging demands and priorities. The government is ensuring that these resources are strategically allocated internationally."
India a Missed Opportunity: MP
When shown the statistics compiled by Embassy, Canadian Chamber of Commerce president and CEO Perrin Beatty said he was pleased to see the government devoting more trade commissioners to China and India, in particular.
"This appears to be a reflection of the priorities set out by the government in its Global Commerce Strategy, which we consider a great start to Canada's international strategy," Mr. Beatty said in an email. "The trade commissioners do an excellent job for Canadian companies, and in both of the Canadian Chamber's China and India strategy papers, our members had identified the need for 'more boots on the ground' to increase our bilateral commercial ties."
These boots have been waiting patiently. Actually there appear to be graying areas on them.
However, Mr. Beatty noted that Canadian trade commissioners are still operating out of four offices in China, whereas Australia, "which is doing much better in China than Canada is," has 15 trade offices.
" It is not strictly more people that are needed in these countries," he said. "We also need to open more trade offices in China and India, particularly in the second- and third-tier cities."
I think there is answer: outsource research and consulting to locally situated Canadian expatriates.
Mr. Bains, the Liberal trade critic, said the overall increase of trade commissioners was a positive sign, but that it merely represents "baby steps" at a time when global competition is increasing and Canada is being put on the hot seat.
These baby steps represent Canada's historical trade related risk aversion, an over-reliant complacency in terms of US market share, and domestic shields in the forms of non-tarriff barriers particularly in the educational evaluation and equivalency measures taken in the form of private contracted certification agencies which restrict immigrants from taking jobs for which they are already qualified to do.
He questioned the decision to make massive cuts in Italy and Japan. "These are two very key allies of ours, they are both foreign, mature markets and we need to maintain that relationship," he said. "You can see it's a direct trade off."
Mr. Bains also questioned whether Canada was seeing the benefit of its increased presence in China given frosty relations between the emerging economic power and the Canadian government, and whether border issues with the U.S. are being addressed to ensure the nine new commissioners there are having a benefit. " It's great that we have trade commissioners to promote trade," he said, "but if the product doesn't cross the border, that is something that needs to be addressed."
One thing that stood out for Mr. Bains was the lack of additional resources for India.
"It's a missed opportunity," he said, noting the government has said the country is a priority. "They haven't put any resources behind it. It's all window dressing, it's all photo ops and nothing substantial behind it in terms of increasing the resources. In order to take advantage of the emerging economy in India, you need to have additional trade commissioners and additional resources. Other countries seem to be putting forward additional resources and we seem to be just taking pictures."
NDP Trade critic Peter Julian said his primary concerns were that the government was continuing to put its eggs in the U.S. basket by adding more trade commissioners there, and that the government is focussing on countries with poor human rights records like China, Colombia, Saudi Arabia and the Philippines. "And where they've taken them away from are exactly the areas where we should be looking for growth and trade diversification, that whole list of democracies," he said.
It would be a step forward for Canadian manufacturers to investigate joint-ventures in the North South Korean Gaesong Industrial Complex.
"What the Conservatives have said is we're going to continue to put all our eggs in one basket, except that we're going to enhance our trade support in areas where human rights violations are occurring. And where we're cutting back is where human rights are not a concern and you have vibrant economies."
Mr. Julian also criticized the government for failing to put more resources into trade and investment promotion efforts. "Despite the fact that we've been calling for trade diversification and that Canada needs much more on-the-ground support for its products and services abroad," he said, "what we're seeing over a couple of years, from the old Liberals to the new Conservatives, that there's been a very, very marginal increase."
Again, opening up the virtual trade commissioner website to expatriates willing to do local global consulting would be a powerful step to having more minds thinking about the same difficult problems. Not all of us are government employees or even work for Canadian companies. However in the interests of independent consulting as Friedman remarks in "The Lexus and the Olive Tree" sharing knowledge is everything and the willingness to share it often determines your output, profit, and levels of success.
(Embassy) (With Costello Comments)
The government has slashed its trade commissioner ranks in Europe over the past two years, while bolstering its presence in key Latin American and Asian countries, as well as the United States, Embassy has discovered.
The results have garnered mixed reactions from various corners, though respondents overwhelming agreed that Canada is not devoting sufficient resources to its trade and investment promotion efforts abroad. "For me, it is reflective of the bigger picture," Liberal Trade critic Navdeep Bains said Monday, "which is that they cut the funding overall for the department, which means they are really stretched for resources."
For example Nova Scotia and other smaller provinces are seeing a movement towards local produce to support local farming. At the same time this localized type of consumption pattern should stimulate local/global marketing efforts to sell those spare pigs, chickens, and organic materials to emerging countries like Korea with many specialized however small "well-being" type shops.
In the fall of 2005 and 2006, the Department of Foreign Affairs and International Trade compiled for Canadian and international businesses a book containing a list of all trade commissioners posted in Canada and in Canadian missions abroad. The list included the name, title, contact details and area of expertise for each official, including heads of mission involved in trade or investment promotion, trade commissioner assistants and provincial trade representatives. The government has not prepared a similar handbook this year, but does have the most up-to-date information available on its Virtual Trade Commissioner website in the same format.
This virtual trade commissioner website removed my password without notification and upon enquiry I was told by Ingeborg Henn, "because you represent a foreign company you are not eligible for a Virtual Trade Commissioner. We appreciate your understanding in this matter." I wrote a reply asking for consideration and the control and flow of information as it stands at DFAIT left my reply unanswered.
Embassy compiled the lists last week, deciding to use statistics from 2005 to compare to this year because it has only been in the last year that the government has closed four missions abroad and clearly stated its international goals and priorities. According to the listing, the number of trade commissioners Canada has sent abroad increased by 20 from two years ago, up to 932.
Asia as a whole hosted more Canadian trade commissioners than any other region, and saw the largest increase over the past two years, with 18 more added. The country that registered the largest increase was China. Fifteen more were added to the ranks, resulting in the presence of 72 trade commissioners working on the ground.
China has been identified as a priority for the Canadian government as part of its emerging economies strategy. A number of other Asian countries, notably the Philippines and Malaysia, also saw notable increases as the government also focused on Southeast Asia.
Surprisingly, however, is that Canada increased its trade commissioner presence in India by only three to 31, though that increase actually occurred last year. India has also been lumped in with China as a priority.
Perhaps unsurprisingly, the government also increased the Canadian presence in Latin America, adding nine new trade commissioners to the region, including five to Colombia. The Conservative government has come under fire for standing by Colombia's government and promoting an agenda of free trade at a time when the country is still plagued by countless human rights violations, government corruption and the continued paramilitary presence.
Brazil, on the other hand, which has been identified as the region's major economy, saw no change over the past two years, nor did Peru, which the government has also touted as an important element of its Americas strategy.
Despite repeated statements from International Trade Minister David Emerson that Canada needs to diversify its trade portfolio away from the United States, especially given the current economic climate, Canada has devoted nine new trade commissioners to enhancing Canada's largest trading relationship.
Mexico, however, saw no change from two years ago. Four trade commissioners that had been added last year were gone by this year, even though Canada has said it wants to drum up relations with the other NAFTA nation.
Reductions Hit Europe Hardest
In March, the government closed four missions abroad with little advance notice. The consulates-general in St. Petersburg and Milan both economic hubs within Europe, as well as the consulates in Osaka and Fukuoka, Japan, were shuttered. The end result, it is now clear, was a significant reduction in presence in each of those countries. Canada scaled back the number of trade commissioners it has posted in Russia over the past year from 11 to nine, while four were moved out of Japan, leaving 34.
Italy, however, was the hardest hit of all countries in the world, down from 20 trade commissioners two years ago to nine as of last week. Europe as a whole suffered from the reshuffling, losing 15 commissioners over the past two years.
Italian Ambassador to Canada Gabriele Sardo said he was not surprised that his country had lost the largest number of Canadian trade commissioners, or that the government is moving away from Europe. "This can only point to one very simple fact," he said, "that Canada is losing interest in keeping a close look at what happens inside Europe, but rather is focussing on other parts of the world, which we already knew."
Mr. Sardo said many countries are ramping up resources to engage India and China, but would not comment on whether it was a good strategy. "Everyone talks about catching up," he said. "Maybe so much catch up is not necessary, but maybe it is certainly necessary."
In explaining the changes, International Trade spokeswoman Valerie Noftle said in an email that the department "needs to ensure that we are at the right place with the right people and doing the right thing."
"Fundamentally it is about finding more efficient ways to work in support of the government's foreign policy and international trade priorities," she added. "Staffing strategies are developed in terms of recruitment and retention, so that our work force can play a key role in advancing Canada's international agenda."
Funny that my applications to DFAIT for twelve years have gone unanswered.
The department is planning to "better align" its resources in support of the government's foreign and trade policy priorities, Ms. Noftle said. "Like other departments, our annual business plan requires us to examine where our resources are and re-calibrate to respond to emerging demands and priorities. The government is ensuring that these resources are strategically allocated internationally."
India a Missed Opportunity: MP
When shown the statistics compiled by Embassy, Canadian Chamber of Commerce president and CEO Perrin Beatty said he was pleased to see the government devoting more trade commissioners to China and India, in particular.
"This appears to be a reflection of the priorities set out by the government in its Global Commerce Strategy, which we consider a great start to Canada's international strategy," Mr. Beatty said in an email. "The trade commissioners do an excellent job for Canadian companies, and in both of the Canadian Chamber's China and India strategy papers, our members had identified the need for 'more boots on the ground' to increase our bilateral commercial ties."
These boots have been waiting patiently. Actually there appear to be graying areas on them.
However, Mr. Beatty noted that Canadian trade commissioners are still operating out of four offices in China, whereas Australia, "which is doing much better in China than Canada is," has 15 trade offices.
" It is not strictly more people that are needed in these countries," he said. "We also need to open more trade offices in China and India, particularly in the second- and third-tier cities."
I think there is answer: outsource research and consulting to locally situated Canadian expatriates.
Mr. Bains, the Liberal trade critic, said the overall increase of trade commissioners was a positive sign, but that it merely represents "baby steps" at a time when global competition is increasing and Canada is being put on the hot seat.
These baby steps represent Canada's historical trade related risk aversion, an over-reliant complacency in terms of US market share, and domestic shields in the forms of non-tarriff barriers particularly in the educational evaluation and equivalency measures taken in the form of private contracted certification agencies which restrict immigrants from taking jobs for which they are already qualified to do.
He questioned the decision to make massive cuts in Italy and Japan. "These are two very key allies of ours, they are both foreign, mature markets and we need to maintain that relationship," he said. "You can see it's a direct trade off."
Mr. Bains also questioned whether Canada was seeing the benefit of its increased presence in China given frosty relations between the emerging economic power and the Canadian government, and whether border issues with the U.S. are being addressed to ensure the nine new commissioners there are having a benefit. " It's great that we have trade commissioners to promote trade," he said, "but if the product doesn't cross the border, that is something that needs to be addressed."
One thing that stood out for Mr. Bains was the lack of additional resources for India.
"It's a missed opportunity," he said, noting the government has said the country is a priority. "They haven't put any resources behind it. It's all window dressing, it's all photo ops and nothing substantial behind it in terms of increasing the resources. In order to take advantage of the emerging economy in India, you need to have additional trade commissioners and additional resources. Other countries seem to be putting forward additional resources and we seem to be just taking pictures."
NDP Trade critic Peter Julian said his primary concerns were that the government was continuing to put its eggs in the U.S. basket by adding more trade commissioners there, and that the government is focussing on countries with poor human rights records like China, Colombia, Saudi Arabia and the Philippines. "And where they've taken them away from are exactly the areas where we should be looking for growth and trade diversification, that whole list of democracies," he said.
It would be a step forward for Canadian manufacturers to investigate joint-ventures in the North South Korean Gaesong Industrial Complex.
"What the Conservatives have said is we're going to continue to put all our eggs in one basket, except that we're going to enhance our trade support in areas where human rights violations are occurring. And where we're cutting back is where human rights are not a concern and you have vibrant economies."
Mr. Julian also criticized the government for failing to put more resources into trade and investment promotion efforts. "Despite the fact that we've been calling for trade diversification and that Canada needs much more on-the-ground support for its products and services abroad," he said, "what we're seeing over a couple of years, from the old Liberals to the new Conservatives, that there's been a very, very marginal increase."
Again, opening up the virtual trade commissioner website to expatriates willing to do local global consulting would be a powerful step to having more minds thinking about the same difficult problems. Not all of us are government employees or even work for Canadian companies. However in the interests of independent consulting as Friedman remarks in "The Lexus and the Olive Tree" sharing knowledge is everything and the willingness to share it often determines your output, profit, and levels of success.
China Becomes Top Source of Eurozone Imports
China Becomes Top Source of Eurozone Imports
(Financial Times)
China overtook the UK as the biggest source of imports into the eurozone in the first nine months of this year, according to official figures yesterday that highlighted the competitive threat facing Europe-based manufacturers.
Imports from China, at €123.7bn ($178.3bn, £88.3bn) were 20 per cent higher in the year to September than in the same period in 2006, reported Eurostat, the European Union's statistical unit. Imports from the UK fell by 2 per cent to €122.3bn.
(Financial Times)
China overtook the UK as the biggest source of imports into the eurozone in the first nine months of this year, according to official figures yesterday that highlighted the competitive threat facing Europe-based manufacturers.
Imports from China, at €123.7bn ($178.3bn, £88.3bn) were 20 per cent higher in the year to September than in the same period in 2006, reported Eurostat, the European Union's statistical unit. Imports from the UK fell by 2 per cent to €122.3bn.
Thursday, December 20, 2007
Snapshots in Time: Moments of Truth Revisited
Service Management: Strategy and Leadership in Service Businesses (Review Part Two)Richard Normann (1984) Wiley Press
Richard Normann appears to have set a new benchmark for explaining the service process as consecutive moments of truth. His framewwork satisfies and continously solidfies the working relationships among business co-participants, internal and external customers and perhaps establishes strong loyalites among these herds where the model is well demonstrated through continued patronage and purchase. However the analogy of matador and bull where carried through to its full cycle is somewhat worrying for the health of the customer. The analogy maintains a position of superior control in the hands of the skilled business service management of the customer and implies that the customer is somehow difficult, dangerous, unpredictable and unreliable unless handled with a coup de grace and quickly dispensed.
While the visual artistry of the matador may be more heavily relied upon to support a positive allegory such entertainment which in some manner must be convincing in solidifying purchase decisions or commitments on the part of undecided customers by observation of and appreciation for the spectacle takes on an incredibly artistic and thus intangible element. This positively supports the process of finding and achieving moments of truth in service. Such moments of truth engage and compel the business service due to the delight and satisfaction of customers who appear to remain in some ways prey-like in the analogy. How the gleam of an iridescent pearl might catch the eye of a raven or otherwise curious bird - excellent service is thus portrayed as the asset that many of today’s companies claim are the goals while in the backroom their adage might be process the customer as quickly as possible at the same time.
A friend of mine who manages things somewhere in the call centre industry reminds me of the swift progress made from moments of truth to common moments of hurry up and wait in reality. The services customers often contend with today as a global standard often lack humanity. Her early beginnings in call centre services were novel, new, creative and ground-breaking in the early nineties. Enough so that her office was situated in a leafy block of trendy West Vancouver and she and her coworkers were eager to demonstrate the support of their software assistance contracts to new users globally. The days of call centres being a new idea are long over and perhaps the end of their useful lifecycle is at hand.
Normann demonstrates in Chapter 9 the problems associated with service businesses over their lifecycle. Schumpeter's creative destruction theories suggest something will follow the era of call centre service to replace it even in its outsourced or off-shored formats through a continued diversification, a continued internationalisation over time which will propel further new innovations to consume and reflect more profitable moments of truth. He also posits that technology while serving a significant role in shaping service innovations is not more important than social behaviours which adapt and change as readily which tend towards greater client participation in the refinement of service delivery. Here he describes reproduction of innovation and the growth of a service company as being the two most difficult challenges through numerous examples. But Normann fully reaffirms the process of continuous self-improvement as being the focal dynamic capability which companies require to succeed in a simple variable approach to change and innovation, process location, context, resources, client input, self-designed versus borrowed improvements and economic benefits which coincide with dispersed diluted managerial head office control over the changes desired.
In Chapter Ten Normann delivers a positive cycle of successful internationalisation which defines foci as the structural capacity of a company to develop a deep network of business contacts to infuse new knowledge into the business, attract good customers and personnel alike, retain them through developing high quality and cost advantages which lead to profitable results and opportunities for continued growth which enrich the nodes of the cycle. His description of quality in product and service reveals different areas of discussion of quality as precepts enrobing product, process, production, and philosophy. He affirms that the goals of quality are an affirmation of human dignity which coincidentally support aspects of human nature which I believe need to be confirmed in the present world globally as to the standards of humane treatment of customers and workers alike to encourage the continued growth of enlightened attitudes of care and helpfulness for others even in the context of competitive businesses. He defines hard and soft features of service which determine its quality such as core packaging, delivery and interactions and the culture of the service itself in a systemic view.
Again, Normann believes the defining strategic positioning of a service process is the drive to create quality in the transaction of the service benefiting from continuous feedback mechanisms between personnel and clients in the interest of precisely matching a need for moments of truth to encourage higher customer loyalty, satisfaction and limit turnover. He defines failures in service as directly the responsibility of top management not driving the company through example, specialization of quality improvements into a service department responsibility rather than a general employee motivated element of work, ambiguity as to the role of customer management, an inability to motivate or maintain quality circles as the essential ownership and responsibility of staff without support or actions taken upon their considerable recommendations, a failure to conceptualize long-term planning, and attempts to attach price tags to sustained customer satisfaction improvements.
Singapore to Scan U.S.-Bound Cargo for Hazardous Material
Singapore to Scan U.S.-Bound Cargo for Hazardous Material
(AFP)
Singapore, one of the world's busiest container ports, will scan U.S.-bound cargo for hazardous materials under an international trial project, a statement said Monday.
Officials from the two countries have signed a declaration to conduct the six-month trial under the Secure Freight Initiative (SFI), a joint statement from the U.S. embassy and Singapore's Ministry of Transport said.
Singapore is one of seven global ports participating in the trial, under which U.S.-bound shipping containers are scanned for nuclear or radiological materials before being loaded onto ships, the statement said.
Data from the scanning are sent in near real-time to the United States where officers determine whether the container carries hazardous material, it said.
"This trial project is an important step toward a possible trade model that secures the global supply chain," said the United States ambassador to Singapore, Patricia Herbold.
SFI trials began in Honduras in April. Other participating ports are in the United Kingdom, Oman, Pakistan, South Korea and Hong Kong.
Data from the trial will allow the U.S. to assess the viability and effectiveness of implementing 100 percent scanning of US-bound containers, the statement said.
(AFP)
Singapore, one of the world's busiest container ports, will scan U.S.-bound cargo for hazardous materials under an international trial project, a statement said Monday.
Officials from the two countries have signed a declaration to conduct the six-month trial under the Secure Freight Initiative (SFI), a joint statement from the U.S. embassy and Singapore's Ministry of Transport said.
Singapore is one of seven global ports participating in the trial, under which U.S.-bound shipping containers are scanned for nuclear or radiological materials before being loaded onto ships, the statement said.
Data from the scanning are sent in near real-time to the United States where officers determine whether the container carries hazardous material, it said.
"This trial project is an important step toward a possible trade model that secures the global supply chain," said the United States ambassador to Singapore, Patricia Herbold.
SFI trials began in Honduras in April. Other participating ports are in the United Kingdom, Oman, Pakistan, South Korea and Hong Kong.
Data from the trial will allow the U.S. to assess the viability and effectiveness of implementing 100 percent scanning of US-bound containers, the statement said.
Border Security Chills Trade Relations
Border Security Chills Trade Relations
(CSCB)
The following was reported in December 17, 2007 edition of “globeandmail.com”.
Canada's trade relations with the United States are being hurt by U.S. protectionism and Washington's aggressive security bureaucracy, forces that are regularly erecting new obstacles to cross-border commerce, International Trade Minister David Emerson warns.
"I think the threat is that we will just continue this bottom up accumulation of little, border-impeding, border-thickening initiatives," he said in an interview.
"[It's] been disheartening for some years now, the degree to which protectionist forces in the U.S. – and now some of the rigid mindsets of the security establishment – are really starting to, I think, threaten the special relationship that used to be there."
He said he hears more and more "horror stories" of companies forced by border delays to warehouse costly inventory on either side of the Canada-U.S. border and "referring to it as a just-in-case supply chain rather than just-in-time."
He said the United States must act to stop this creeping "thickening" of the Canada-U.S. border.
"They have to, at a very high level, recommit, to the North American relationship and it has to be a ... top-down thing," Mr. Emerson said. "Somebody at the high level has to say it's time that this stopped."
Mr. Emerson said that while Canada's political relationship with the United States is the best it's been in 20 years, impediments to doing business with Americans are growing.
"It's a source of serious concern because Canada cannot afford – [and] frankly neither can the U.S. – to see cross-border supply chains start to be weakened."
He said the post-9/11 security approach among U.S. government departments has led to a raft of new border obstacles, fees and inspections.
"You get this absolute supremacy of security trumping everything ... You get the bureaucrats in the departments and they are all powerful and they don't feel they have to listen to compromise or alternative solutions. In a way it's a disease of institutional bureaucracy and excessive empowerment."
Mr. Emerson said it's troubling that U.S. military export rules are preventing Canadian defence and aerospace contractors from working for Washington in Canada, because U.S. prohibitions against sharing military data with citizens of about two dozen countries are denying work to staff with dual nationalities based in this country.
"Private companies are in some cases finding they have no choice but to produce on the U.S. side of the border."
Canada this year failed to prevent Washington from imposing controversial new border taxes and inspections on trucks and railway cars. Also, this spring, talks collapsed on a pilot project to conduct customs inspections well before the border, following a dispute over whether U.S. authorities could fingerprint individuals on Canadian soil.
Mr. Emerson said the 2004 Security and Prosperity Partnership agreement – which is supposed to deepen economic relations between Canada and the United States by removing irritants – has helped a bit.
"But as long as the ... [U.S.] bureaucracy is out there creating new problems almost monthly, you've got to stop the overall erosion," he said.
David Wilkins, the U.S. ambassador to Canada, is far more optimistic about the state of bilateral trade relations and suggested security problems are being ironed out.
"I think the headlines should be reading: 'U.S. and Canada trade $1.6-billion of trade and commerce today without any security incidents.' We don't talk about the good news," Mr. Wilkins said.
More costs, more delays
March, 2007: Less than six months after a softwood lumber truce is signed by Canada and the United States, Washington disrupts the peace by formally complaining over allegedly unfair conduct by Ottawa and the Canadian provinces, launching arbitration that could impose more costs on this country's timber producers.
April, 2007: Talks collapse between Washington and Ottawa on a pilot project to conduct customs inspections well before reaching the border, following a dispute over whether U.S. authorities could fingerprint individuals on Canadian soil even if they didn't cross the border.
June, 2007: Washington plows ahead with controversial new border taxes and inspections for trucks and railway cars from Canada – part of a rash of new levies that will extract more than $75-million (U.S.) a year.
June, 2007: A Conference Board of Canada report says the harsh security crackdown at the Canada-U.S. border since 9/11 has forced exporters in key industries to abandon just-in-time delivery and return to the outdated practice of stockpiling goods.
Summer, 2007: Border crossing wait times worsen, according to some observers. Stan Korosec, vice-president of operations of the Blue Water Bridge, which links Sarnia, Ont., and Port Huron, Mich., calls 2007 the "summer from hell," saying he saw some of the longest waits since 2001, adding that U.S. border guards are asking more questions and sending more trucks to secondary inspection.
November, 2007: Anti-terror security measures put in place by the U.S. and Canadian governments since 9/11 have burdened Canada's transportation industry with up to half-a-billion dollars in extra costs, a Transport Canada report says.
(CSCB)
The following was reported in December 17, 2007 edition of “globeandmail.com”.
Canada's trade relations with the United States are being hurt by U.S. protectionism and Washington's aggressive security bureaucracy, forces that are regularly erecting new obstacles to cross-border commerce, International Trade Minister David Emerson warns.
"I think the threat is that we will just continue this bottom up accumulation of little, border-impeding, border-thickening initiatives," he said in an interview.
"[It's] been disheartening for some years now, the degree to which protectionist forces in the U.S. – and now some of the rigid mindsets of the security establishment – are really starting to, I think, threaten the special relationship that used to be there."
He said he hears more and more "horror stories" of companies forced by border delays to warehouse costly inventory on either side of the Canada-U.S. border and "referring to it as a just-in-case supply chain rather than just-in-time."
He said the United States must act to stop this creeping "thickening" of the Canada-U.S. border.
"They have to, at a very high level, recommit, to the North American relationship and it has to be a ... top-down thing," Mr. Emerson said. "Somebody at the high level has to say it's time that this stopped."
Mr. Emerson said that while Canada's political relationship with the United States is the best it's been in 20 years, impediments to doing business with Americans are growing.
"It's a source of serious concern because Canada cannot afford – [and] frankly neither can the U.S. – to see cross-border supply chains start to be weakened."
He said the post-9/11 security approach among U.S. government departments has led to a raft of new border obstacles, fees and inspections.
"You get this absolute supremacy of security trumping everything ... You get the bureaucrats in the departments and they are all powerful and they don't feel they have to listen to compromise or alternative solutions. In a way it's a disease of institutional bureaucracy and excessive empowerment."
Mr. Emerson said it's troubling that U.S. military export rules are preventing Canadian defence and aerospace contractors from working for Washington in Canada, because U.S. prohibitions against sharing military data with citizens of about two dozen countries are denying work to staff with dual nationalities based in this country.
"Private companies are in some cases finding they have no choice but to produce on the U.S. side of the border."
Canada this year failed to prevent Washington from imposing controversial new border taxes and inspections on trucks and railway cars. Also, this spring, talks collapsed on a pilot project to conduct customs inspections well before the border, following a dispute over whether U.S. authorities could fingerprint individuals on Canadian soil.
Mr. Emerson said the 2004 Security and Prosperity Partnership agreement – which is supposed to deepen economic relations between Canada and the United States by removing irritants – has helped a bit.
"But as long as the ... [U.S.] bureaucracy is out there creating new problems almost monthly, you've got to stop the overall erosion," he said.
David Wilkins, the U.S. ambassador to Canada, is far more optimistic about the state of bilateral trade relations and suggested security problems are being ironed out.
"I think the headlines should be reading: 'U.S. and Canada trade $1.6-billion of trade and commerce today without any security incidents.' We don't talk about the good news," Mr. Wilkins said.
More costs, more delays
March, 2007: Less than six months after a softwood lumber truce is signed by Canada and the United States, Washington disrupts the peace by formally complaining over allegedly unfair conduct by Ottawa and the Canadian provinces, launching arbitration that could impose more costs on this country's timber producers.
April, 2007: Talks collapse between Washington and Ottawa on a pilot project to conduct customs inspections well before reaching the border, following a dispute over whether U.S. authorities could fingerprint individuals on Canadian soil even if they didn't cross the border.
June, 2007: Washington plows ahead with controversial new border taxes and inspections for trucks and railway cars from Canada – part of a rash of new levies that will extract more than $75-million (U.S.) a year.
June, 2007: A Conference Board of Canada report says the harsh security crackdown at the Canada-U.S. border since 9/11 has forced exporters in key industries to abandon just-in-time delivery and return to the outdated practice of stockpiling goods.
Summer, 2007: Border crossing wait times worsen, according to some observers. Stan Korosec, vice-president of operations of the Blue Water Bridge, which links Sarnia, Ont., and Port Huron, Mich., calls 2007 the "summer from hell," saying he saw some of the longest waits since 2001, adding that U.S. border guards are asking more questions and sending more trucks to secondary inspection.
November, 2007: Anti-terror security measures put in place by the U.S. and Canadian governments since 9/11 have burdened Canada's transportation industry with up to half-a-billion dollars in extra costs, a Transport Canada report says.
Viewpoint – Top Five China Recall Lessons
Viewpoint – Top Five China Recall Lessons
(Industry Week)
Kick an anthill, you find ants. Dig a ditch, you find dirt. Inspect Chinese imports, you find defects.
You're muttering amen if you've ever done business in China. Unfortunately, disruptions and defects are the norm there, not the exception. We can expect more product recalls, from more companies in more industries, if only because we're finally looking.
Don't be the next Mattel. The trick is not to learn from experience, as Warren Buffett says, but to learn from other people's experience. Here are five lessons to consider.
1. Pride goeth before the recall.
If PR is a window on the corporate soul, then Mattel's publicity reveals a complacent giant, just weeks before the massive recalls hit. In a feature profile last July, the Internal Herald Tribune (IHT) portrayed Mattel as the gold standard in China manufacturing. Mattel had invested in China "before it was cool" and had the game beat, piped experts and Mattel's own staff.
A few weeks later, they were recalling millions of toys.
RC2 got complacent, too. After years of China sourcing, they just assumed that their contractors and subcontractors would keep delivering goods that complied with specifications.
The time to worry is when you've had some success under your belt. Conditions in China mutate daily, and no system is impregnable. Keep checking for breaches in your defenses. Don't assume that what happened yesterday will happen again tomorrow.
2. What you don't know, can hurt you.
Mattel owns majority stakes in more than half its China suppliers. What did that get them? As they say in Mandarin, bubkes. Clearly, ownership will not improve your oversight. Visibility will. Remember Mighty Mattel got blindsided by puny subcontractors.
Since a typical Chinese supply chain has sixteen parties or more, you've got to get a handle on who takes title of the goods and materials along the way. That's the first step in mitigating performance risk.
Map out the players in your chain. Then once you've established the lay of the land, try to stay alert to the shifting sands. In China, factories close in the middle of the night and move away. A subcontractor in your line-up may have been swapped for another without your knowledge – and it's that guy you need to be worrying about.
3. Don't rely. Verify!
I met a man who imported chairs from China. Containers would arrive piled high with chairs that broke when you sat on them.
No amount of clarification of the specs would do. The defective chairs kept coming. So the man institutionalized the Tush Test. If he hadn't sat on it first, the chair didn't pass inspection. While you don't need to be that, uhm, anal, the lesson here is that on-site verification at key points in your production cycle is critical to success.
Unfortunately for Mattel, headquarters relied on the QC reports from hindquarters. There was even a local Chinese manager on staff, specifically tasked to monitor the lead levels in paint. He was singled out in the pre-recall IHT article. (I'd hate to be that guy right now.)
Don't rely on inspection reports. Go see for yourself.
4. The world ain't flat.
Flat Worlders get their heads handed to them in China. Mattel thought it could run a plant in Guanjo as if it were in Gary. RC2 thought it could beam files to design engineers in Dongguan, then sit back and wait for quality merchandise to roll out of its 35 Chinese contract manufacturers.
In a flat world, these procedures could have worked. But I.T. is not the great leveler the pundits preach it is. So you can Skype an engineer on the plant floor. So what? You can't run your China supply chain from the click of a mouse. In China, paper, not packets, is still the dominant mode of information delivery and storage.
If anything, technology brings the chaos of China's operating environment right into your living room. And it's an ilk of chaos you've probably never encountered before. Just because Americans and Chinese both embrace the profit motive doesn't mean our fundamental assumptions about doing business are aligned. Bedrock concepts in the West that underpin contracts, financial reporting, and corporate governance – the very way we do business – are still quite new in China and have yet to be assimilated.
There's no parity in China and there's no flatness. To assume otherwise is to court disaster.
5. Opportunity knocks.
If it's still a crapshoot to make a Barbie doll in China that complies with specs, try building a car. Sure, the recalls have exposed a few companies that need to do a better job at QC, but Mattel and RC2 can improve. The real take-away from the outbreak of product recalls is just how far China still has to go before it can rival American industrial capability.
While China catches up, its consumer markets are booming. China's middle class already numbers over 160 million people. These new, urban consumers want all the amenities of a modern, middle class existence – or put another way: they want all the value-added goods and services that China is not good at making and that we're number one at making.
This basic congruence points to why China today is, far and away, America's fastest growing export market. Many U.S. industries – from raw materials to semi-finished to finished goods – are seeing double digit quarterly export growth to China.
And with the falling dollar making your goods even cheaper to sell overseas, now more than ever is the time to get in there. In China's growing consumer class, we have a once in a century windfall opportunity to make money and create jobs here at home.
As more and more products get recalled in the coming months, resist the urge to lean back. The lessons the recalls impart, you can take to the bank.
Jeremy Haft is the author of "All the Tea in China: How to Buy, Sell, and Make Money on the Mainland" (Penguin/Portfolio, 2007) and founder of BChinaB Inc, a China contract manufacturing and logistics firm.
(Industry Week)
Kick an anthill, you find ants. Dig a ditch, you find dirt. Inspect Chinese imports, you find defects.
You're muttering amen if you've ever done business in China. Unfortunately, disruptions and defects are the norm there, not the exception. We can expect more product recalls, from more companies in more industries, if only because we're finally looking.
Don't be the next Mattel. The trick is not to learn from experience, as Warren Buffett says, but to learn from other people's experience. Here are five lessons to consider.
1. Pride goeth before the recall.
If PR is a window on the corporate soul, then Mattel's publicity reveals a complacent giant, just weeks before the massive recalls hit. In a feature profile last July, the Internal Herald Tribune (IHT) portrayed Mattel as the gold standard in China manufacturing. Mattel had invested in China "before it was cool" and had the game beat, piped experts and Mattel's own staff.
A few weeks later, they were recalling millions of toys.
RC2 got complacent, too. After years of China sourcing, they just assumed that their contractors and subcontractors would keep delivering goods that complied with specifications.
The time to worry is when you've had some success under your belt. Conditions in China mutate daily, and no system is impregnable. Keep checking for breaches in your defenses. Don't assume that what happened yesterday will happen again tomorrow.
2. What you don't know, can hurt you.
Mattel owns majority stakes in more than half its China suppliers. What did that get them? As they say in Mandarin, bubkes. Clearly, ownership will not improve your oversight. Visibility will. Remember Mighty Mattel got blindsided by puny subcontractors.
Since a typical Chinese supply chain has sixteen parties or more, you've got to get a handle on who takes title of the goods and materials along the way. That's the first step in mitigating performance risk.
Map out the players in your chain. Then once you've established the lay of the land, try to stay alert to the shifting sands. In China, factories close in the middle of the night and move away. A subcontractor in your line-up may have been swapped for another without your knowledge – and it's that guy you need to be worrying about.
3. Don't rely. Verify!
I met a man who imported chairs from China. Containers would arrive piled high with chairs that broke when you sat on them.
No amount of clarification of the specs would do. The defective chairs kept coming. So the man institutionalized the Tush Test. If he hadn't sat on it first, the chair didn't pass inspection. While you don't need to be that, uhm, anal, the lesson here is that on-site verification at key points in your production cycle is critical to success.
Unfortunately for Mattel, headquarters relied on the QC reports from hindquarters. There was even a local Chinese manager on staff, specifically tasked to monitor the lead levels in paint. He was singled out in the pre-recall IHT article. (I'd hate to be that guy right now.)
Don't rely on inspection reports. Go see for yourself.
4. The world ain't flat.
Flat Worlders get their heads handed to them in China. Mattel thought it could run a plant in Guanjo as if it were in Gary. RC2 thought it could beam files to design engineers in Dongguan, then sit back and wait for quality merchandise to roll out of its 35 Chinese contract manufacturers.
In a flat world, these procedures could have worked. But I.T. is not the great leveler the pundits preach it is. So you can Skype an engineer on the plant floor. So what? You can't run your China supply chain from the click of a mouse. In China, paper, not packets, is still the dominant mode of information delivery and storage.
If anything, technology brings the chaos of China's operating environment right into your living room. And it's an ilk of chaos you've probably never encountered before. Just because Americans and Chinese both embrace the profit motive doesn't mean our fundamental assumptions about doing business are aligned. Bedrock concepts in the West that underpin contracts, financial reporting, and corporate governance – the very way we do business – are still quite new in China and have yet to be assimilated.
There's no parity in China and there's no flatness. To assume otherwise is to court disaster.
5. Opportunity knocks.
If it's still a crapshoot to make a Barbie doll in China that complies with specs, try building a car. Sure, the recalls have exposed a few companies that need to do a better job at QC, but Mattel and RC2 can improve. The real take-away from the outbreak of product recalls is just how far China still has to go before it can rival American industrial capability.
While China catches up, its consumer markets are booming. China's middle class already numbers over 160 million people. These new, urban consumers want all the amenities of a modern, middle class existence – or put another way: they want all the value-added goods and services that China is not good at making and that we're number one at making.
This basic congruence points to why China today is, far and away, America's fastest growing export market. Many U.S. industries – from raw materials to semi-finished to finished goods – are seeing double digit quarterly export growth to China.
And with the falling dollar making your goods even cheaper to sell overseas, now more than ever is the time to get in there. In China's growing consumer class, we have a once in a century windfall opportunity to make money and create jobs here at home.
As more and more products get recalled in the coming months, resist the urge to lean back. The lessons the recalls impart, you can take to the bank.
Jeremy Haft is the author of "All the Tea in China: How to Buy, Sell, and Make Money on the Mainland" (Penguin/Portfolio, 2007) and founder of BChinaB Inc, a China contract manufacturing and logistics firm.
Tuesday, December 18, 2007
Asia Pacific Region to Avoid Recession, But Other Challenges Loom
Asia Pacific Region to Avoid Recession, But Other Challenges Loom Says New Report
(Canada-Asia News)
The Asia Pacific region will experience slower economic growth in 2008, but is likely to avoid a sharp downturn due to the sub-prime mortgage crisis in the US, according to the Pacific Economic Cooperation Council’s annual State of the Region report. PECC forecasters expect 4.9% real GDP growth for the region as a whole in 2008, rising to 5.2% in 2009. This forecast assumes that the United States will not enter into a recession and that a recovery in the housing sector will take place in the second half of 2008.
The report includes the findings of PECC’s annual survey of opinion leaders in the Asia Pacific region. Survey respondents identified high energy prices, water pollution, and global warming as the top three risks to economic growth in the region.
The full report can be found at http://www.pecc.org/sotr/.
(Canada-Asia News)
The Asia Pacific region will experience slower economic growth in 2008, but is likely to avoid a sharp downturn due to the sub-prime mortgage crisis in the US, according to the Pacific Economic Cooperation Council’s annual State of the Region report. PECC forecasters expect 4.9% real GDP growth for the region as a whole in 2008, rising to 5.2% in 2009. This forecast assumes that the United States will not enter into a recession and that a recovery in the housing sector will take place in the second half of 2008.
The report includes the findings of PECC’s annual survey of opinion leaders in the Asia Pacific region. Survey respondents identified high energy prices, water pollution, and global warming as the top three risks to economic growth in the region.
The full report can be found at http://www.pecc.org/sotr/.
Monday, December 17, 2007
China Opens Largest Free-Trade Harbor Area in N Port City
China Opens Largest Free-Trade Harbor Area in N Port City
(China View)
China's largest free-trade harbor area, which enjoys the most preferential tax treatments, started operation in the northern port city of Tianjin Tuesday, a further move in the country's opening-up strategy.
Dongjiang Bonded Harbor Area, close to Beijing and located in the Bohai-rim region, "is designated as the pilot among others to adopt reforms and renovations to promote the opening-up drive," LiKenong, deputy chief of China Customs, said at the inauguration ceremony.
The area is set to enjoy the most favorable policies in taxation and foreign exchange policies and offers comprehensive services in international shipping, distribution, purchase, transit trade and export processing businesses following the practices of international hubs, free ports and free trade zones, according to Li.
The first phase of the harbor area, which currently covers foursquare kilometers and includes warehouses, container terminals, processing and logistics zones, involved 6.6 billion yuan (nearly 900 million U.S. dollars) in corporate investment.
The project, which was approved by the State Council on August 31, last year, is scheduled to become fully operational by 2010 when the second phase of another 6-sq-km area is completed, realizing a designed capacity of handling 4 million containers per year.
The bonded area is expected to boost development of Tianjin Binhai New Zone, which has been designated as pilot for many of China's new economic and financial policies. …
Complete article at
(China View)
China's largest free-trade harbor area, which enjoys the most preferential tax treatments, started operation in the northern port city of Tianjin Tuesday, a further move in the country's opening-up strategy.
Dongjiang Bonded Harbor Area, close to Beijing and located in the Bohai-rim region, "is designated as the pilot among others to adopt reforms and renovations to promote the opening-up drive," LiKenong, deputy chief of China Customs, said at the inauguration ceremony.
The area is set to enjoy the most favorable policies in taxation and foreign exchange policies and offers comprehensive services in international shipping, distribution, purchase, transit trade and export processing businesses following the practices of international hubs, free ports and free trade zones, according to Li.
The first phase of the harbor area, which currently covers foursquare kilometers and includes warehouses, container terminals, processing and logistics zones, involved 6.6 billion yuan (nearly 900 million U.S. dollars) in corporate investment.
The project, which was approved by the State Council on August 31, last year, is scheduled to become fully operational by 2010 when the second phase of another 6-sq-km area is completed, realizing a designed capacity of handling 4 million containers per year.
The bonded area is expected to boost development of Tianjin Binhai New Zone, which has been designated as pilot for many of China's new economic and financial policies. …
Complete article at
Thursday, December 13, 2007
The cat is out of the bag...
I admit this cat has been ruminating upon lots of diffusive materials related to international trade and anything that catches my reading and writing eyes really.
The Korea Herald editorial team has requested me to contribute a weekly column on the topic of expat finance from January 2008 and I am really excited to put some suggestions and discussions forward to improve the lives of expats in Korea and beyond.
Any suggestions on what you would like me to cover however briefly please feel free to send me a note.
China Grants U.S. Expanded Role in Inspecting Foods
China Grants U.S. Expanded Role in Inspecting Foods
(International Herald Tribune)
China and the United States, seeking to ease the furor over the safety of food exports, signed an agreement Tuesday calling for a greater U.S. role in certifying and inspecting Chinese food exports, including an increased presence of American officials at Chinese production plants.
The accord, part of several aimed at easing economic tensions with China on a number of divisive subjects, would impose new registration and inspection requirements on Chinese food exporters for 10 specific products. The U.S. government would maintain a public list of the exporters' records.
Michael Leavitt, secretary of health and human services, said he expected that U.S. Food and Drug Administration officials would eventually be embedded in China's food safety bureaucracy to help train Chinese officials and keep records on their inspections. He offered no numbers on how many officials would be involved, however. …
Complete article at http://www.iht.com/articles/2007/12/11/business/trade.php
(International Herald Tribune)
China and the United States, seeking to ease the furor over the safety of food exports, signed an agreement Tuesday calling for a greater U.S. role in certifying and inspecting Chinese food exports, including an increased presence of American officials at Chinese production plants.
The accord, part of several aimed at easing economic tensions with China on a number of divisive subjects, would impose new registration and inspection requirements on Chinese food exporters for 10 specific products. The U.S. government would maintain a public list of the exporters' records.
Michael Leavitt, secretary of health and human services, said he expected that U.S. Food and Drug Administration officials would eventually be embedded in China's food safety bureaucracy to help train Chinese officials and keep records on their inspections. He offered no numbers on how many officials would be involved, however. …
Complete article at http://www.iht.com/articles/2007/12/11/business/trade.php
Wednesday, December 12, 2007
Key Oil Exporters Can Turn Into Importers in 10 Years: Report
Key Oil Exporters Can Turn Into Importers in 10 Years: Report
(AFP)
Some of the leading oil-exporting countries may start importing oil 10 years from now in order to satisfy the needs of their own booming economies, The New York Times reported on its website late Saturday.
Citing experts and industry projection, the newspaper said this change of roles had already occurred in Indonesia, while Mexico could start importing oil within five years.
According to the paper, these two countries could be followed later by Iran, which is currently the world’s fourth-largest crude exporter.
"It is a very serious threat that a lot of major exporters that we count on today for international oil supply are no longer going to be net exporters any more in 5 to 10 years," the report quotes Amy Myers Jaffe, an oil analyst at Rice University, as saying.
A recent report by CIBC World Markets indicated that increasing oil consumption in Russia, Mexico and in several members of the Organization of Petroleum Exporting Countries would reduce crude exports by as much as 2.5 million barrels a day by the end of the decade, or about three percent of global oil demand, according to The Times.
The paper recalls that a 2002 labor strike in Venezuela reduced global oil production by about that much, but the net result was a 26-percent increase in oil prices.
The trend, experts say, will most likely result in market shifts, in which unconventional sources like Canadian tar sands will gain in importance, especially for the United States, The Times pointed out.
Political pressure to open areas now closed to oil production is also likely to increase, the paper noted.
(AFP)
Some of the leading oil-exporting countries may start importing oil 10 years from now in order to satisfy the needs of their own booming economies, The New York Times reported on its website late Saturday.
Citing experts and industry projection, the newspaper said this change of roles had already occurred in Indonesia, while Mexico could start importing oil within five years.
According to the paper, these two countries could be followed later by Iran, which is currently the world’s fourth-largest crude exporter.
"It is a very serious threat that a lot of major exporters that we count on today for international oil supply are no longer going to be net exporters any more in 5 to 10 years," the report quotes Amy Myers Jaffe, an oil analyst at Rice University, as saying.
A recent report by CIBC World Markets indicated that increasing oil consumption in Russia, Mexico and in several members of the Organization of Petroleum Exporting Countries would reduce crude exports by as much as 2.5 million barrels a day by the end of the decade, or about three percent of global oil demand, according to The Times.
The paper recalls that a 2002 labor strike in Venezuela reduced global oil production by about that much, but the net result was a 26-percent increase in oil prices.
The trend, experts say, will most likely result in market shifts, in which unconventional sources like Canadian tar sands will gain in importance, especially for the United States, The Times pointed out.
Political pressure to open areas now closed to oil production is also likely to increase, the paper noted.
Tuesday, December 04, 2007
List of Major American and Korean Banks in Korea
List of Major American and Korean Banks in Korea
List of American Banks in Seoul
List of Major Korean Banks in Seoul
(Note: Telephone dialing information when calling from outside of Korea:
82 is the country code for Korea, followed by 2 which is the city code for Seoul)
List of American Banks in Seoul
American Express Bank Ltd. (Seoul Branch)
15th Floor, Kwanghwamoon Bldg.
64-8, Taepyungro 1-ka, Jung-gu, Seoul 100-101
Tel: 82-2-399-2929
Website: http://www.americanexpress.co.kr
Bank of America National Association
Tel: 82-2-2022-4500, Fax: 82-2-2022-4400
Website: http://www.bankofamerica.com
Bank of New York (Seoul Branch)
23rd Floor, Young Poong Bldg.,
33, Seorin-dong, Jongno-gu, Seoul 100-752
Tel: 82-2-399-0001/6, Fax: 82-2-399-0055
Website: http://www.bankofny.com
Citibank, N.A. (Seoul Branch)
CitiCorp Center Bldg.
89-29, Shinmoonro 2-ka, Jongno-gu, Seoul 110-062
Tel: 82-2-1566-1000 Fax: 82-2-722-1426
Website: http://www.citibank.co.kr
JP Morgan Chase (Seoul Branch)
JP Morgan Chase Bldg.
34-35, Jung-dong, Jung-gu, Seoul 100-120
Tel: 82-2-758-5114, Fax: 82-2-758-5423
Website: http://www.jpmorganchase.com
List of Major Korean Banks in Seoul
Hana Bank
101-1, Ulchiro 1-ka, Jung-gu, Seoul 100-191
Tel: 82-2-1588-1111
Website: http://www.hanabank.co.kr
Woori Bank
203, 1-ga, Hoehyun-dong, Jung-gu, Seoul 100-792
Tel: 82-2-2008-5000
Website: http://www.wooribank.com
Kookmin Bank
9-1, Namdaemoonro 2-ka, Jung-gu, Seoul 100-703
Tel: 82-2-2073-7114
Website: http://www.kookmin.co.kr
KorAm Bank
39, Da-dong, Jung-gu, Seoul 100-180
Tel: 82-2-3704-7205
Website: http://www.goodbank.com
Korea Exchange Bank
181, Ulchiro 2-ka, Jung-gu, Seoul 100-793
Tel: 82-2-729-8000, Fax: 82-2-775-9819 (Int'l. Div.)
Website: http://www.keb.co.kr/english
SC First Bank
SC First Bank, 01-2284 Gongpyungdong, Jongno-gu, Seoul
Tel: 82-2-3702-3114 Fax: 82-2-3702-4965
Website: http://www.scfirstbank.com
Shinhan Bank
120 Taepyeongno-2-ga, Jung-gu, Seoul 100-865
Tel: 82-2-1544-8000, Fax: 82-2-774-7013 (Int'l. Div.)
Website: http://www.shinhan.com
http://www.buyusa.gov/korea/en/bankcontacts.html
List of American Banks in Seoul
List of Major Korean Banks in Seoul
(Note: Telephone dialing information when calling from outside of Korea:
82 is the country code for Korea, followed by 2 which is the city code for Seoul)
List of American Banks in Seoul
American Express Bank Ltd. (Seoul Branch)
15th Floor, Kwanghwamoon Bldg.
64-8, Taepyungro 1-ka, Jung-gu, Seoul 100-101
Tel: 82-2-399-2929
Website: http://www.americanexpress.co.kr
Bank of America National Association
Tel: 82-2-2022-4500, Fax: 82-2-2022-4400
Website: http://www.bankofamerica.com
Bank of New York (Seoul Branch)
23rd Floor, Young Poong Bldg.,
33, Seorin-dong, Jongno-gu, Seoul 100-752
Tel: 82-2-399-0001/6, Fax: 82-2-399-0055
Website: http://www.bankofny.com
Citibank, N.A. (Seoul Branch)
CitiCorp Center Bldg.
89-29, Shinmoonro 2-ka, Jongno-gu, Seoul 110-062
Tel: 82-2-1566-1000 Fax: 82-2-722-1426
Website: http://www.citibank.co.kr
JP Morgan Chase (Seoul Branch)
JP Morgan Chase Bldg.
34-35, Jung-dong, Jung-gu, Seoul 100-120
Tel: 82-2-758-5114, Fax: 82-2-758-5423
Website: http://www.jpmorganchase.com
List of Major Korean Banks in Seoul
Hana Bank
101-1, Ulchiro 1-ka, Jung-gu, Seoul 100-191
Tel: 82-2-1588-1111
Website: http://www.hanabank.co.kr
Woori Bank
203, 1-ga, Hoehyun-dong, Jung-gu, Seoul 100-792
Tel: 82-2-2008-5000
Website: http://www.wooribank.com
Kookmin Bank
9-1, Namdaemoonro 2-ka, Jung-gu, Seoul 100-703
Tel: 82-2-2073-7114
Website: http://www.kookmin.co.kr
KorAm Bank
39, Da-dong, Jung-gu, Seoul 100-180
Tel: 82-2-3704-7205
Website: http://www.goodbank.com
Korea Exchange Bank
181, Ulchiro 2-ka, Jung-gu, Seoul 100-793
Tel: 82-2-729-8000, Fax: 82-2-775-9819 (Int'l. Div.)
Website: http://www.keb.co.kr/english
SC First Bank
SC First Bank, 01-2284 Gongpyungdong, Jongno-gu, Seoul
Tel: 82-2-3702-3114 Fax: 82-2-3702-4965
Website: http://www.scfirstbank.com
Shinhan Bank
120 Taepyeongno-2-ga, Jung-gu, Seoul 100-865
Tel: 82-2-1544-8000, Fax: 82-2-774-7013 (Int'l. Div.)
Website: http://www.shinhan.com
http://www.buyusa.gov/korea/en/bankcontacts.html
Presidential Candidates All Oppose Media Policy
Presidential Candidates All Oppose Media Policy
All six leading presidential candidates surveyed by the JoongAng Ilbo said the government decision to shut down the press rooms was a bad idea and unlikely to succeed. But their positions diverged on other media issues, such as whether print companies should be allowed to operate broadcasting firms. While Lee Myung-bak, Lee Hoi-chang and Rhee In-je, all following the typically conservative line, said newspapers should be allowed to run television stations to be more competitive, Chung Dong-young, Moon Kook-hyun and Kwon Young-ghil, on the liberal side, said permitting such an arrangement could lead to a monopoly of opinion. All six candidates oppose President Roh Moo-hyun’s media policy, which took effect in August. Roh put the policy in effect to try to end the exclusive atmosphere among reporters in the press rooms at various ministries, and also restricted access to officials. Grand National Party candidate Lee Myung-bak said he “certainly believed a media policy should be based on a grand principle that the press should have the freedom to write and report.” “Closing down press rooms and voiding existing press passes are outdated measures only an authoritarian government can do,” he said. “When I become elected, I am going to review this policy from the starting point.” Running independent this time, Lee Hoi-chang, in his third bid for president, called the media policy “deadly.” The United New Democratic Party candidate Chung Dong-young, a former television journalist who was a unification minister under Roh, said, “I understand why this policy went into effect, but I do not agree with how it’s being conducted,” Chung said. “It should be conducted in a way that lets reporters have enough access to sources for the sake of letting people know what they should know.” Only Lee Myung-bak and Rhee vowed to undo the changes.
From http://joongangdaily.joins.com/ 11/16/2007
All six leading presidential candidates surveyed by the JoongAng Ilbo said the government decision to shut down the press rooms was a bad idea and unlikely to succeed. But their positions diverged on other media issues, such as whether print companies should be allowed to operate broadcasting firms. While Lee Myung-bak, Lee Hoi-chang and Rhee In-je, all following the typically conservative line, said newspapers should be allowed to run television stations to be more competitive, Chung Dong-young, Moon Kook-hyun and Kwon Young-ghil, on the liberal side, said permitting such an arrangement could lead to a monopoly of opinion. All six candidates oppose President Roh Moo-hyun’s media policy, which took effect in August. Roh put the policy in effect to try to end the exclusive atmosphere among reporters in the press rooms at various ministries, and also restricted access to officials. Grand National Party candidate Lee Myung-bak said he “certainly believed a media policy should be based on a grand principle that the press should have the freedom to write and report.” “Closing down press rooms and voiding existing press passes are outdated measures only an authoritarian government can do,” he said. “When I become elected, I am going to review this policy from the starting point.” Running independent this time, Lee Hoi-chang, in his third bid for president, called the media policy “deadly.” The United New Democratic Party candidate Chung Dong-young, a former television journalist who was a unification minister under Roh, said, “I understand why this policy went into effect, but I do not agree with how it’s being conducted,” Chung said. “It should be conducted in a way that lets reporters have enough access to sources for the sake of letting people know what they should know.” Only Lee Myung-bak and Rhee vowed to undo the changes.
From http://joongangdaily.joins.com/ 11/16/2007
Gov't to Allow Labor-strapped Service Sector to Hire More Foreigners
Gov't to Allow Labor-strapped Service Sector to Hire More Foreigners
Korea's service sector will be featuring more foreign faces. Hotels, restaurants and related services will be able to employ a larger number of foreigners for the first time in order to break through their manpower shortage, the Labor Ministry said on Nov. 8. Accommodation services such as inns and motels, regulated by the Health and Welfare Ministry, will be able to start employing foreigners from the end of this year. Under the new regulation, accommodation services, other than hotels, will now be able to hire foreign nationals but only those who are over 45 years of age and have emigrated from Korea in the past. This specific qualification was set just for this sector in order to limit employment to those that can speak Korean fluently, the ministry said. Hotels, regulated separately by the Tourism Ministry, will be allowed to start hiring foreign nationals from Nov. 12. In detail, foreigners with English skills will be able to work at hotels located in industrial sites frequented by foreigners, but the program is operating on a trial run only, the ministry explained. Also starting from now, restaurants with six to 10 employees will be able to employ up to four foreign nationals, a rise from the current limit of three. These and other measures are to help alleviate a manpower shortage in the nation's service industry. The government also decided to expand the employment opportunities for foreigners in other industries such as construction, farming and livestock, with improved operation of Korean-language tests offered to those wishing to work in Korea. There are over one million foreigners residing in Korea with nearly 430,000 working here.
From http://www.korea.net/ 11/09/2007
Korea's service sector will be featuring more foreign faces. Hotels, restaurants and related services will be able to employ a larger number of foreigners for the first time in order to break through their manpower shortage, the Labor Ministry said on Nov. 8. Accommodation services such as inns and motels, regulated by the Health and Welfare Ministry, will be able to start employing foreigners from the end of this year. Under the new regulation, accommodation services, other than hotels, will now be able to hire foreign nationals but only those who are over 45 years of age and have emigrated from Korea in the past. This specific qualification was set just for this sector in order to limit employment to those that can speak Korean fluently, the ministry said. Hotels, regulated separately by the Tourism Ministry, will be allowed to start hiring foreign nationals from Nov. 12. In detail, foreigners with English skills will be able to work at hotels located in industrial sites frequented by foreigners, but the program is operating on a trial run only, the ministry explained. Also starting from now, restaurants with six to 10 employees will be able to employ up to four foreign nationals, a rise from the current limit of three. These and other measures are to help alleviate a manpower shortage in the nation's service industry. The government also decided to expand the employment opportunities for foreigners in other industries such as construction, farming and livestock, with improved operation of Korean-language tests offered to those wishing to work in Korea. There are over one million foreigners residing in Korea with nearly 430,000 working here.
From http://www.korea.net/ 11/09/2007
SOUTH KOREA: Among Top Science, Tech Powerhouses by 2012: Gov't
SOUTH KOREA: Among Top Science, Tech Powerhouses by 2012: Gov't
Korea aims to become the one of the world's top five science and technology powerhouses by 2012, the government said Sunday (Nov. 4). The plan by the Ministry of Science and Technology calls for more allocation of funds for research and development (R&D), the strengthening of knowhow in innovative cutting-edge technologies and concentration of scientific resources on promising growth industries. "About 3.2 percent of the gross domestic product is being used for R&D at present, but Seoul wants to raise the figure to at least 3.5 percent by 2012, with 1 percent of the state's budget set aside to bolster this endeavor," said a ministry official. In 2005, the country spent roughly US$23.59 billion on R&D. The United States spent more that 13 times that amount, with Japan spending 6 times as much. The figure increased to slightly more than $29 billion last year. He said the ranking will be determined by the Switzerland-based International Institute of Management and Development (IMD), whose 2007 competitiveness report placed South Korea seventh among 55 countries in the science area and sixth in terms of technological prowess. The official also said policymakers and experts want to concentrate efforts to build up 40 key strategic technologies along with 60 vital skills that could ensure South Korea's standing in the science and technology field. Among the key technologies, Seoul wants to become a world leader in next-generation high-speed trains, nano-materials, robotics, eco-friendly cars, hydrogen fuel cells and energy storage as well as biotech areas, including stem cell and cancer treatment. The Science Ministry said there will be fine-tuning of objectives as the government receives feedback, and the goal of making the top five will not be easy. In the 2007 IMD report, the United States ranked first in both science and technology areas, with Japan, Germany, Switzerland, Sweden and Taiwan taking second to sixth place in the science ranking. In technology competitiveness, Singapore came in second, followed by Hong Kong, Denmark and Israel.
From http://www.korea.net/ 11/04/2007
Korea aims to become the one of the world's top five science and technology powerhouses by 2012, the government said Sunday (Nov. 4). The plan by the Ministry of Science and Technology calls for more allocation of funds for research and development (R&D), the strengthening of knowhow in innovative cutting-edge technologies and concentration of scientific resources on promising growth industries. "About 3.2 percent of the gross domestic product is being used for R&D at present, but Seoul wants to raise the figure to at least 3.5 percent by 2012, with 1 percent of the state's budget set aside to bolster this endeavor," said a ministry official. In 2005, the country spent roughly US$23.59 billion on R&D. The United States spent more that 13 times that amount, with Japan spending 6 times as much. The figure increased to slightly more than $29 billion last year. He said the ranking will be determined by the Switzerland-based International Institute of Management and Development (IMD), whose 2007 competitiveness report placed South Korea seventh among 55 countries in the science area and sixth in terms of technological prowess. The official also said policymakers and experts want to concentrate efforts to build up 40 key strategic technologies along with 60 vital skills that could ensure South Korea's standing in the science and technology field. Among the key technologies, Seoul wants to become a world leader in next-generation high-speed trains, nano-materials, robotics, eco-friendly cars, hydrogen fuel cells and energy storage as well as biotech areas, including stem cell and cancer treatment. The Science Ministry said there will be fine-tuning of objectives as the government receives feedback, and the goal of making the top five will not be easy. In the 2007 IMD report, the United States ranked first in both science and technology areas, with Japan, Germany, Switzerland, Sweden and Taiwan taking second to sixth place in the science ranking. In technology competitiveness, Singapore came in second, followed by Hong Kong, Denmark and Israel.
From http://www.korea.net/ 11/04/2007
NORTH AND SOUTH KOREA: Inter-Korean Business
NORTH AND SOUTH KOREA: Inter-Korean Business to Be Funded by Private, Public, Global Investment
Criticism of South Korea's economic assistance to North Korea is mounting after the 2007 South-North Korean summit. Reports say that the assistance is one-sided, not synergistic, discouraging economic collaboration and widening the ideological gap between the two. South Korean economic investment in the North is both public and private. Public assistance by the governemnt is aimed at providing core industrial infrafastructures to improve the investment environment in North Korea. Private investment is aimed at generating profits. Taking the Gaeseong Industrial Complex (GIC) as an example, the price for lots was extremely burdensome for South Korean SMEs when the complex first opened. So, the government initially provided critical manufacturing resources such as electricity and water to bring down the overall costs. Gaeseong Industrial ComplexSome fault the South Korean government's efforts to help SMEs form inter-Korean businesses as being counter productive. Still, many South Korean manufacturers have so far chosen to invest in North Korea despite the high risks from an underdeveloped market and the nuclear problems. South Korean SMEs have been struggling since tne early 1990s, when labor-intensive small- and mid-sized manufacturers lost their competiveness with the rise of Chinese rivals. They began to move their bases to East Asian countries and China. Korean manufacutrers have steadily gained ground in China, but most investment has been made by robust conglemerates, not SMEs. The GIC's opportunities threw a lifeline to SME owners who were being squeezed by lower-priced foreign competitors but lacked the capital to relocate production off the peninsula.
It is unreasonable to call government assistance to these SMEs as unrewarding. Recently, media have been reporting that most corporations in the GIC are operating in the red. First of all, it is important to note that a company's profit status depends a lot on the timing of the analysis. Inter-Korean Donghae Line on the east coastSecond, no company reaches the break-even point in the initial phase wheter it is domestic or foreign investment. Korean SMEs in China, Vietnam and India break even 3 to 5 years after operation. GIC firms however have broken even only 10 months after launch and plan to expand their operation luring more investment from outside. It is true that the GIC has obstacles blocking investment, but the situation is gradually improving. Another erroneous argument about North Korean investment is that the South Korean government is compensating for losses -- as much as 70 billion won according to one article. The government merely provides insurance through the Inter-Korean Cooperation Fund to cover unforseen accidents beyond the employers' control, including war. Some are concerned about how to maintain financial suport for inter-Korean cooperation projects. They estimate the required budget from one to 116 trillion won, which is groundless. The financial burden for the South Korean government is much lighter than their expectations because most resources will come from private investment. Government's investment will be limited to the necessary infrastructure establishment. Foreign countries are also showing interest in inter-Korean economic collaboration. For example, China and Russia are reviewing support for North Korea's railway refurbishment. European countries, including Germany, intend to participate in the linking of the inter-Korean railway to inter-continental railroads. What counts is how much North Korea is willing and ready to attract international monetary support. Once North Korea is removed from the list of terror-sponsoring states and economic sanctions are lifted, many countries are likely to invest in its economy. Although such investment will not be huge, it will be a great starting point for economic recovery. When investments from the private sector, the government and international entities are combined, they will not only reduce the cost of unification but also lay the groundwork for inter-Korean economic integration.
From http://www.korea.net/ 11/05/2007
Criticism of South Korea's economic assistance to North Korea is mounting after the 2007 South-North Korean summit. Reports say that the assistance is one-sided, not synergistic, discouraging economic collaboration and widening the ideological gap between the two. South Korean economic investment in the North is both public and private. Public assistance by the governemnt is aimed at providing core industrial infrafastructures to improve the investment environment in North Korea. Private investment is aimed at generating profits. Taking the Gaeseong Industrial Complex (GIC) as an example, the price for lots was extremely burdensome for South Korean SMEs when the complex first opened. So, the government initially provided critical manufacturing resources such as electricity and water to bring down the overall costs. Gaeseong Industrial ComplexSome fault the South Korean government's efforts to help SMEs form inter-Korean businesses as being counter productive. Still, many South Korean manufacturers have so far chosen to invest in North Korea despite the high risks from an underdeveloped market and the nuclear problems. South Korean SMEs have been struggling since tne early 1990s, when labor-intensive small- and mid-sized manufacturers lost their competiveness with the rise of Chinese rivals. They began to move their bases to East Asian countries and China. Korean manufacutrers have steadily gained ground in China, but most investment has been made by robust conglemerates, not SMEs. The GIC's opportunities threw a lifeline to SME owners who were being squeezed by lower-priced foreign competitors but lacked the capital to relocate production off the peninsula.
It is unreasonable to call government assistance to these SMEs as unrewarding. Recently, media have been reporting that most corporations in the GIC are operating in the red. First of all, it is important to note that a company's profit status depends a lot on the timing of the analysis. Inter-Korean Donghae Line on the east coastSecond, no company reaches the break-even point in the initial phase wheter it is domestic or foreign investment. Korean SMEs in China, Vietnam and India break even 3 to 5 years after operation. GIC firms however have broken even only 10 months after launch and plan to expand their operation luring more investment from outside. It is true that the GIC has obstacles blocking investment, but the situation is gradually improving. Another erroneous argument about North Korean investment is that the South Korean government is compensating for losses -- as much as 70 billion won according to one article. The government merely provides insurance through the Inter-Korean Cooperation Fund to cover unforseen accidents beyond the employers' control, including war. Some are concerned about how to maintain financial suport for inter-Korean cooperation projects. They estimate the required budget from one to 116 trillion won, which is groundless. The financial burden for the South Korean government is much lighter than their expectations because most resources will come from private investment. Government's investment will be limited to the necessary infrastructure establishment. Foreign countries are also showing interest in inter-Korean economic collaboration. For example, China and Russia are reviewing support for North Korea's railway refurbishment. European countries, including Germany, intend to participate in the linking of the inter-Korean railway to inter-continental railroads. What counts is how much North Korea is willing and ready to attract international monetary support. Once North Korea is removed from the list of terror-sponsoring states and economic sanctions are lifted, many countries are likely to invest in its economy. Although such investment will not be huge, it will be a great starting point for economic recovery. When investments from the private sector, the government and international entities are combined, they will not only reduce the cost of unification but also lay the groundwork for inter-Korean economic integration.
From http://www.korea.net/ 11/05/2007
Finnish Investment Decisions in South Korea
Finnish Investment Decisions in South Korea
(Holy Hannah its huge!)
"Foreign Direct Investment in a Changing Political Environment: Finnish Investment Decisions in South Korea" by Kristina Korhonen
Helsinki School of Economics
helecon3.hkkk.fi/pdf/diss/a265.pdf
(Holy Hannah its huge!)
"Foreign Direct Investment in a Changing Political Environment: Finnish Investment Decisions in South Korea" by Kristina Korhonen
Helsinki School of Economics
helecon3.hkkk.fi/pdf/diss/a265.pdf
Saturday, December 01, 2007
China 'ends illegal tax breaks'
China 'ends illegal tax breaks'
(BBC News)
China has agreed to end the granting of tax breaks to local manufacturers at the expense of U.S. and Mexican firms, according to US trade officials.
Under the deal, China will remove the subsidies that the U.S. claimed gave Chinese companies an unfair competitive advantage by the end of the year.
The move is a major breakthrough for U.S.-China trade relations which have been strained recently, analysts say.
It comes months after the U.S. filed a case on the issue at the WTO.
(BBC News)
China has agreed to end the granting of tax breaks to local manufacturers at the expense of U.S. and Mexican firms, according to US trade officials.
Under the deal, China will remove the subsidies that the U.S. claimed gave Chinese companies an unfair competitive advantage by the end of the year.
The move is a major breakthrough for U.S.-China trade relations which have been strained recently, analysts say.
It comes months after the U.S. filed a case on the issue at the WTO.
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