The Impact of China’s Accession to the World Trade Organization: Implications for Korea and Japan

by Caroline G. Cooper, Korea Economic Institute

In her testimony before the House Ways and Means Committee on February 16, 2000, United States Trade Representative Charlene Barshefsky, stated

“WTO accession thus represents a potentially profound and historic shift, building upon but going much further than China’s domestic reforms to date. As it joins the WTO, China will do much more than reduce trade barriers at the border. For the first time since the 1940s, it will: Permit foreigners and Chinese businesses to import freely into China; Reduce, and in some cases remove entirely, state control over internal distribution of goods and the provision of services; Enable foreign businesses to participate in information industries such as telecommunications including the Internet; and Subject its decisions in all areas covered by the WTO enforcement, including through formal dispute settlement when necessary.”

As China prepares to enter the World Trade Organization (WTO), the world will be watching to see if the new China envisioned by Barshefsky will become a reality. While governments clearly have a vested interest in China’s WTO accession, so do businesses, particularly those in the Republic of Korea^[1] and Japan. With its close proximity and established trading relationship with China, Korea will have the most to gain and lose from China’s WTO accession.^[2] Korean companies will not only face increased competition in the region from Chinese companies, but also in overseas markets such as the United States. For some, this may be cause for joy by forcing larger Korean companies to speed up the pace of restructuring and by offering smaller firms more export opportunities. On the other hand, however, Korean firms will face stiffer competition at home as imports from China are likely to increase several-fold. This may be cause for concern should Korea’s trade surplus with China become a permanent trade deficit. This paper will address these issues by answering the following questions:

· What is the nature of trade and investment relations between China and Korea in the 1990s?

· What are the implications of China’s WTO accession for Korea and Japan?

· Is China important for the future of intra-Asian trade, particularly for Korea?

Section I will highlight China-Korea trade and investment trends in the 1990s. Section II will then outline both the policy and economic implications of China’s accession to the WTO for Korea, focusing on public and private sector views on the issue. Finally, section III and section IV will summarize the implications of China’s WTO accession for Japan and the future of trilateral relations between China, Korea, and Japan.

In the short-to-medium term, Korean and Japanese companies will benefit from China’s accession to the WTO, as complementarity has long been the hallmark of East Asian trade. Intra-Asian trade will increase, giving Japan new investment opportunities and Korea a larger market for its exports. In the long run, however, Asian companies will face increased competition and in some cases, Chinese firms will force Korea out of markets it once dominated. Increased regional cooperation may not be a panacea, but pose even greater obstacles for Korea.

Why is China Important to Korea?

China’s accession is important to Korea to open the door to new export opportunities. Historically, Korea has been an export-driven economy, reliant upon exports to fuel economic growth. Korea relies heavily upon foreign imports for its exports, but in recent years, has rarely suffered from excessive imports. Since the financial crisis in 1997, Korea has maintained a trade surplus. In 1999, however, the trade surplus decreased considerably because of a 29% increase in imports compared to 1998. The Korean Ministry of Commerce, Industry, and Energy (MOCIE) reported that most of the imports were intermediate goods—parts and other factor inputs for manufactured goods, particularly for information technology. Since Korea cannot produce these goods at home and as competition increases, imports will continue to rise. In January of this year, for example, MOCIE reported that overall imports hit a record, increasing by over 40% from the same period last year. This resulted in a trade deficit equivalent to $400 billion.

Following the January announcement, President Kim Dae Jung was quoted as saying that “Imports are expanding at too rapid a rate. We need to inform the public of the details of the recent trade deficit and ask them to help us in our efforts to reduce imports.”^[3] Besides the rise in imports, Korean government officials blame the January deficit on “seasonal factors” including increased tourist spending abroad, appreciation of the won, and high oil prices. To forestall a further rise in the deficit, the President has urged increases in household savings and export competitiveness. Asian markets provide welcome opportunities for increased exports, most notably China. In January of this year, the Korean government reported that exports to China increased by more than 50% over the same period last year. This may not continue, however, if the Japanese yen or Chinese yuan depreciate.^[4] Still, with China expected to enter the WTO in the future, Koreans are particularly optimistic about greater market access. Korea has tended to increase its export competitiveness through increased trading relations with China.

China-Korea Trade Relations

China-Korea trade relations have been a mixed blessing for many Korean companies. Not only has expanding relations opened new markets abroad, but also increased competition at home. In 1992, China and Korea signed an agreement to normalize diplomatic relations. The agreement sought to deepen economic relations by providing a foundation for increased private sector cooperation and technology transfer by granting China Most Favored Nation (MFN) status.

Trade between China and Korea has skyrocketed since 1992 (see Figure 1). Today, China is Korea’s third largest trading partner after the United States and Japan. Korea is China’s fourth largest trading partner after the United States, Japan, and Hong Kong. From 1992-1997, two-way trade increased by over 30% annually, reaching an all-time high of $23.6 billion in 1997. Two-way trade decreased slightly to $18.3 billion in 1998 because of the financial crisis, but recovered to $20.5 billion in 1999.^[5] In 1992, Korea had a trade deficit with China of $1.1 billion. Since then, however, the deficit has turned into a surplus. Figure 2 shows that the surplus increased by 358% from 1993 to 1998, when it reached a peak of $5.5 billion during the financial crisis. After the United States and Japan, China has been Korea’s 3^rd largest export market. If including Hong Kong, China would have been Korea’s second largest export market. For the first 11 months of 1999, total imports from China amounted to $7.9 billion, while Korean exports to China amounted to $12.6 billion.

Since China and Korea renewed relations, trade has been complementary.^[6] Korea found China to be a strong export market for cheap intermediate goods (i.e. steel, petrochemicals, and textiles). Research has shown that from 1993-1998, petrochemical exports accounted for 22% of Korea’s total exports to China, while textiles accounted for 16.4%, and steel for 12.2%.^[7] In recent years, Korea’s market share of petrochemicals in China has increased to 30%. In exchange for goods from Korea, China provided Korea with needed raw materials and consumer goods, as well as most of Korea’s agriculture imports. Other than the fact the two countries have cultural similarities and close geographic proximity, relations have improved through trade agreements and industrial cooperation.

Generally, trade agreements have benefited Korea more than China. Korea has increased its market share in China by seeking reductions in tariff and non-tariff trade barriers, particularly import quotas, in automobiles, steel, televisions, and other electronic goods. In these agreements, efforts have also been made to address China’s ineffective regulatory framework for intellectual property rights and increase financial assistance for Korean companies operating in China. While both nations trade equally in textile products, for example, Korea has exported more value-added goods.^[8] This has been one reason Korea continually recommends that the Chinese government make adjustments to rules of origin in its bilateral textile agreements.

For China, benefits gained through improved relations with Korea have come through technology transfer. This began in 1994 when the two countries created the Committee on Korea-China Industrial Cooperation. Since then, the Committee has met regularly to seek expanded trade and cooperation in industry; science & technology; information and telecommunications; environment; energy; natural resources; agriculture; forestry; nuclear energy; social infrastructure; and railways. Particular emphasis has been placed on expanding trade and investment in information technology and natural resources. This has helped China to shift away from exporting agriculture and raw materials to Korea, to exporting more industrial goods such as steel, apparel, and petrochemicals.^[9] In the case of steel, for example, as China built up its nascent steel industry, demand for Korean imports decreased by 20% from 1992 to 1996. Moreover, Chinese exports of agriculture products to Korea decreased, while steel exports increased. From 1992 to 1996, steel exports to Korea increased fourfold. Since 1998, however, there has been a further downturn in steel trade with China over rising trade disputes. China has taken notice of steel import surges from Korea and charged Korea with dumping. Korea has not challenged China’s antidumping claims, unclear about how to deal with China’s opaque judiciary and trade adjudication system.

Because Korea has traditionally lacked research and development potential, it has always been an importer of intermediate goods, particularly from Japan and the United States. In recent years, this trend has expanded to areas in which Korea has an export advantage, such as semiconductors and computers. In 1999, for example, Korea exported over $17 billion in semiconductors and imported over $15 billion.^[10] Now, China is emerging as another leading exporter of electronics to Korea. China is Korea’s third largest importing nation after the United States and Japan. Of Korea’s top ten imports for 1998–semiconductors, crude petroleum, general machinery, petrochemicals, coal and cokes, farm products, general organic products, general steel products, general petroleum products, and naphtha–China captured 7% of the market share.

Two of the biggest areas in which Korea and China compete are apparel and footwear.^[11] In 1998, there was a significant decrease in demand for Korean apparel and footwear when China devalued its currency and limited market access. Today, Chinese apparel manufacturers are moving to Korea. In the case of footwear, Korean firms are now moving to China due to cheaper labor and production costs.

China-Korea Investment Relations

Until recently, Korea has been closed to foreign direct investment (FDI). The basis for Korea’s foreign investment policy has been the Foreign Capital Inducement Act of 1960 (FCIA) which aimed at: increasing technology transfer and joint venture ownership; and reducing FDI in nascent industries. ^[12] Since the financial crisis, Korea has amended the FCIA “to remove restrictive measures and realign Korea’s foreign direct investment system in line with international norms and standards.”^[13] This opening has increased the value of foreign direct investment considerably. Analysts note that the most significant gain from increased FDI has been an increase in the transfer of technology.^[14] For 1999, the Ministry of Commerce, Industry and Energy reports that foreign direct investment in Korea increased by 76% over 1998. Total investment in 1999 was $15 billion, of which Japanese and U.S. investment accounted for 25%. Most of the investments were in the manufacturing and services sector, but a significant portion of foreign direct investment was also directed toward the electronics sector.

Chinese investment in Korea has also increased over the last year. Traditionally, China’s investment in Korea has been limited to agriculture, textiles, and apparel.^[15] Since the early 1990s, however, China has sought greater investment in high-tech areas. Between 1998 and 1999, China increased its investment in Korea twofold. Since June of 1999, Chinese firms have come to Korea to set up small retail and wholesale businesses, particularly in electronics.

From 1992 to 1996, investment by Korea in China increased by 492%, but declined slightly during the financial crisis to $630 million (see Figure 3). Today, Korea is China’s sixth largest investor and China is Korea’s second largest recipient of foreign direct investment. Research has shown that Koreans view investment in China positively.^[16] Not only does China have lower-waged labor and cheaper production facilities, it also serves as a conduit for investment in other parts of Asia. Korean foreign direct investment in China has been concentrated in areas where traditional Sino-Korean relations exist, such as the Northeastern and Shangdong provinces. The majority of Korean firms have established either a manufacturing base in China or formed joint ventures. Small and medium-sized companies have benefited the most from joint ventures, while the larger chaebol have benefited significantly from investment in the non-manufacturing sector.

Today, Korean firms are eyeing new markets in China, particularly in the telecommunications and automobile sectors.^[17](Oct-Dec 1999) In telecommunications, Korea wants to exploit its export advantage in code division multiple access (CDMA) technology in Asia. In autos, Korea wants to take advantage of establishing new production facilities in China. Hyundai-Kia, for example, wants to increase joint production facilities in the country by 300,000 units per year. Reports also show that Samsung Electronics has formed a $31 million joint venture with China’s Hebei Century Mobil. In addition, Samsung Electronics has bid for a contract with China United Telecommunications Corporation, while Shinsegi Telecomm and SK Telecom are bidding for strategic alliances to provide CDMA equipment. Korea Telecom and KT Freetel are also seeking entry into China’s CDMA market. While Korean companies support joint ventures, the government favors technology transfers.

China and the WTO: Implications for Korea

Policy Implications

Within the next 10 years, Korea hopes to become the eighth largest trading country in the world. It also seeks to become the business center of Northeast Asia. Many policy officials believe the best way to achieve these goals are to take advantage of new opportunities in China after WTO accession. Businesses, however, are not convinced that this is the only way to increase Korea’s export advantages.

Korean government officials welcome China’s entry in the WTO. Korea has been a member of the WTO Working Party on China’s accession since its inception and completed its own bilateral accession agreement with China in 1997. Government officials point out that Korea has only to gain from China’s entry, but businesses note the opposite. Officials say that China will now be subject to the rule of law and enforcement of international agreements. Businesses hope that the government will take the necessary precautions to ensure that China lives up to these agreements and to safeguard against import surges. Korean officials point out that they will have no problem bringing China before the WTO dispute settlement body, should China fail to comply with its WTO commitments. Some analysts note that China has nothing to gain by not complying with its WTO commitments, but Korea will be looking to other trading partners for help in ensuring that China complies with its agreements, particularly because these countries requested more from China in the way of tariff reduction and increased market access than Korea.

One policy question that officials are still contemplating is how will China’s entry in the WTO be beneficial for the Northeast Asian region. Will it forge deeper relations between China, Japan, and Korea, thus paving the way for a future regional trade agreement among the three countries? Or will it work against increased regional cooperation? Korean officials believe that China’s entry in the WTO will provide the impetus for deepening economic cooperation between the three nations. Some believe, however, that China will take a different approach and align itself with other developing countries. Already countries, like the United States, have classified China as a developing, nonmarket economy in certain provisions within its own bilateral agreement. If China becomes leverage for developing countries to gain a greater voice in the WTO, some fear there will be an end to multilateralism and a rise in regionalism and regional free trade agreements.

Economic Implications

Reaction from the Korean business community to China’s entry in the WTO has been both positive and negative.^[18] In the short-to-medium term, the Korea Institute for International Economic Policy predicts that Korea will expand its market access in China, increasing China-Korea trade by $1.7 billion a year. The Samsung Economic Research Institute finds that the biggest gains for Korea will be increases in exports to China by $1.2-$1.5 billion. As indicated in Figure 4, if tariffs on electronics goods are reduced to 15%, Korean firms will expand exports in limited areas such as televisions, DVDs, and liquid crystal displays (LCDs). Korean electronics manufacturers will, however, face marked increases in international competition. Some analysts fear that China will out compete Korea in electronics and telecommunications, despite Korea’s export advantage in CDMA technology. Analysts for Morgan Stanley Dean Witter warn that Korea cannot afford to rely solely upon its export advantage in one product area; it must diversify to strengthen its overall export competitiveness.

Korea’s best chances for expanding trade in other product areas after China’s WTO accession will be in autos, steel, and petrochemicals (see Figure 4). Korean auto producers will face stiff international competition and they will be restricted in their types of exports; however, they will have new opportunities for investment in facilities and to increase trade in automotive parts. In petrochemicals, Korea will be able to take advantage of a 5-8% tariff reduction, particularly for polyethylene products. Korea could take advantage of new opportunities in steel trade because of an 8% tariff reduction.

For China, one of the biggest advantages from WTO accession will be increasing agriculture trade with Korea. Within Korea, however, there are concerns that this may prompt a rise in disputes over sanitary and phytosanitary standards (SPS). Industry watchers hope the Korean government will establish more stringent country of origin and SPS requirements.

In the long run, the biggest disadvantage for Korea because of China’s WTO accession will be a decrease in its overall export competitiveness. As more Korean firms relocate to China, analysts predict that China will out compete Korea in the global apparel market. Korea is only expected to increase its market share in the U.S. apparel market. If China surpasses predictions that it will increase overall exports by $2.4-$3 billion upon accession, Korea’s market share in third country markets, like the United States, will decrease to less than 1%. This will be particularly disappointing to Korean companies who regained 3% market share in the United States last year after declining to 2% during the financial crisis. Korea’s export competitiveness will be further weakened if China devalues the yuan. While China did not devalue its currency during the Asian financial crisis, analysts have since studied the effects and likeliness of a devaluation in light of China’s “declining international competitiveness.”^[19] Dr. Cheong Inkyo of the Korea Institute for International Economic Policy found that if China devalues its currency by 10%, Korea’s trade surplus will turn into a $340 million deficit. If the yuan were devalued by 20-30%, the deficit would exceed $1 billion. Should this happen, China would increase its export advantage in steel, electronics, and petrochemicals. The textile industry would be the most adversely affected by a devaluation of the yuan.

Besides trade, another disadvantage for Korea resulting from China WTO accession will be limited opportunities for new investment. No longer will China provide cheaper production sites, for example, since it will reduce regional tax incentives in line with WTO rules on investment. Smaller firms will be able to take advantage of what little investment opportunities that remain rather than the larger chaebol. As noted in Figure 3, Korea’s FDI in China decreased by 25% during the financial crisis. The larger chaebol, many of who are still undergoing restructuring, will not be able to compete against firmly entrenched multinational companies in China.

China’s WTO Accession and Japan

Like Korea, Japan too has a vested interest in increased intra-Asian trade, and particularly investment, resulting from China’s entry in the WTO. Japan and Korea are very similar in that both relied upon export competitiveness to fuel economic growth. In past years, Japan has suffered from a recession, needing exports to drive its weak economy. Like Korea though, Japan also suffered a decline in its trade surplus in January due to the rise in oil prices and increasing consumption. The Japanese Ministry of Finance reported that the merchandise surplus decreased by 30.7%. New opportunities in China will help to mitigate any future fallout of the economy.

Not only does Japan welcome China’s accession into the WTO, but also like Korea, it seeks deeper economic cooperation with China, particularly through technology transfer. Japan completed its own bilateral agreement with China in July of 1999, and has since been a major advocate of other countries completing their agreements.

Trade between Japan and China is very similar to that of China and Korea, vertical complementarity.^[20] Studies by the Japan External Trade Organization (JETRO) have shown that China has traditionally supplied Japan with needed raw materials and agricultural goods, while Japan exported capital goods to China. In 1993, for example, 80% of Japanese exports to China were capital goods, while 52% of the imports were textiles and agricultural products.

Today, China is Japan’s third largest trading partner, and Japan is China’s largest trading partner. The composition of trade between the two countries has shifted dramatically and analysts note that “Japan’s biggest factory these days is a country called China.”^[21] As Japanese investment in China increased, trade shifted toward more horizontal complementarity. Throughout the 1990s, China has decreased exports of raw materials to Japan and increased exports of intermediate and finished goods. Most of the inputs for the finished products were from Japan.^[22] From 1994 to 1995, for example, China increased its market share of general machinery by 30% and electronic parts by 63%. In 1999, of the total imports from China, 63% was electronics; 23% was audio-visual equipment; and 22% was computer equipment.

Recently, the Japanese government reported that China-Japan trade reached a record high of $66.18 billion in 1999, after a slight downturn during the financial crisis. As noted in Figure 5, from 1992 to 1997, two-way trade increased by 120%. Japanese exports to China and Chinese exports to Japan both increased by 16% over 1998. The main difference between China-Korea trade and China-Japan trade is that Japan has traditionally recorded a deficit with China. Figure 6 shows a fourfold increase in the deficit from 1992-1997. The deficit decreased slightly in 1998 due to the financial crisis, but increased in 1999 to approximately $20 billion. One analyst predicts that eventually Japan will enjoy a trade surplus with China if Japan continues to export a large volume of intermediate goods.^[23]

For Japan, the biggest advantages from China’s accession in the WTO are increased investment opportunities. As noted, Sino-Japanese trade relations have expanded steadily as investment in China by Japan has increased. In 1993, for example, Japan’s investment in China was only 4.7% of Japan’s total overseas investment. Total trade that year was $37.8 billion. In 1997, China was Japan’s largest recipient of investment in Asia, amounting to 243.8 billion yen. Total trade that year amounted to $64 billion. Figure 3 shows that Japan’s foreign direct investment in China increased by 214% from 1992 to 1995. Since 1996, however, investment has decreased by nearly 52%. During the financial crisis, exports to China declined considerably because of the Chinese government’s “foreign enterprise preferential policy.” This policy placed restrictions on tax exemptions for certain imports, particularly general machinery. In addition, the Chinese government limited the availability of capital necessary for Chinese firms to purchase foreign goods.

With WTO accession, Japan hopes to target new investment in China’s burgeoning automotive and information technology sectors. Japan also has a vested interest in China’s WTO accession to increase investment and trade with Hong Kong, particularly among its smaller and medium-sized companies. Like Korean firms, Japanese firms find it advantageous to relocate to China.

As with Korea, Japan is also concerned about a possible devaluation of Asian currencies. Noland, for example, notes on the one hand that “a five percent real depreciation of the (yuan) would increase China’s trade surplus by around $20 billion. Exports from Japan and South Korea would decline modestly as Chinese enterprises substituted domestically produced industrial intermediaries for imports.”^[24] On the other hand, a strong yen will benefit trade, but a weak yen would adversely affect on Korea’s international trade competitiveness.

The Future of Trilateral Relations

When discussing China’s WTO accession, perhaps the biggest question for trade analysts is what impact this will have on relations between China, Korea, and Japan. Many Korean officials hope that it will deepen regional economic integration.

Throughout the 1990s, relations between Japan, China, and Korea have increased significantly. In November of 1999, the three countries met in Manila, the Philippines (ASEAN Summit), an event considered to be a watershed in their history. They agreed to meet regularly to design an East Asia Vision Group with the purpose of expanding trade and investment opportunities, particularly in industry, agriculture, fishery, energy, science and technology, transportation, environment, and telecommunications. The leaders also agreed to deepening relations by expanding their roles in international organizations, such as the WTO and APEC. Since that time, proposals have been made to create a Northeast Asian Maritime Community and broaden coordination of the three foreign exchange regimes.

For a number of reasons, deepened economic cooperation between the three countries is not desirable.^[25] To begin with, intra-Asian trade and investment is almost nonexistent compared to that of NAFTA and the European Union. Current estimates show intra-regional trade is less than $200 billion. The most important reason the countries would not benefit from increased economic integration is due to the regional imbalance in trade. China has continually enjoyed a surplus with Japan and deficit with Korea, while Korea has enjoyed a surplus with China and increasing deficit with Japan.

The Asian financial crisis greatly exacerbated the trade imbalance.^[26] The Bank of Korea recently reported that China substantially increased its surplus with Japan and Korea between 1998 and 1999 to $13.5 billion. The increase in the trade imbalance can be attributed to Korea’s deteriorating trade with Japan, largely due to the fact that Korea is heavily reliant upon Japan for imports of hi-tech capital goods. Korea’s total trade deficit with Japan for 1999 was $8.3 billion, of which 80% were imports of general machinery. This has increased over the last year because of Korea’s lifting a ban on Japanese imports. If Korea is to benefit from increased regional trade, it can no longer rely upon machinery imports from either Japan or China, but build its own domestic base for the production of machine goods.

Korea has traditionally suffered from a trade deficit with Japan. In the 1990s, Japan’s slow economic growth and limited import intake exacerbated the deficit due to the devaluation of the yen. Despite this, however, Korea has fared particularly well against Japan in the later half of the 1990s.^[27] Korea has worked hard to build up its own domestic industries despite its limited research and development capability, and shift from exporting light industrial goods to Japan to competing in steel, semiconductors, and shipbuilding. Last year, for example, Korea out competed Japan in shipbuilding. Reports show that in 1999, demand for Korean ships shifted away from low value-added ships to high value-added. Japan, on the other hand, suffered from a decrease in demand for high value-added ships due to its higher priced goods. Any future downward trend in either the won or yen will adversely impact on Korea’s and Japan’s global competitiveness. This was particularly evident in the semiconductor industry in 1998. When the won depreciated during the financial crisis, Japan’s suffered a decline in its global semiconductor exports by 16%.

Should the two countries enter a free trade agreement, Korea’s economic position in the world would plummet. One analyst found that “(I)f Korea and Japan eliminate tariff barriers on a preferential basis, Korea is projected to lose $2 billion annually, and its trade balance with Japan will worsen by $7.1 billion. On the contrary, it appears that Japan will realize substantial gains.”^[28] Adding China to this equation will only make matters unless the three countries compose a three part-strategy. Cheong (1999) concludes that in the short-term, the three countries would have to harmonize trade regulations. In the medium term, they would have to agree to substantial tariff reductions; and in the long-term, they would have to complete liberalization to mitigate the trade imbalance. Even with China’s accession in the WTO, this whole process will take years.

Conclusion

The impact of China’s accession in the WTO on Japan and, particularly Korea, will be both advantageous and disadvantageous. For years, relations between the three countries have been characterized as complementary. Japan increased its investment and Korea exported more goods to help China build up its nascent industries. During the latter half of the 1990s, intra-Asian trade and investment has increased, benefiting China the most. Korean and Japanese companies have flocked to China to take advantage of growing opportunities and China has evolved as an equal competitor with Korea and Japan.

China’s accession in the WTO will increase its global competitiveness. In the short-to-mid term, Japan will enjoy new investment opportunities and Korea will enjoy greater export competitiveness. Both countries will benefit, but in the long-term, Japan is likely to benefit the most. Increased investment will bring an increase in trade to help jumpstart the Japanese economy. For Korea to maintain its export competitiveness in the long-term, it will have to complete its restructuring to be an attractive sight for investment. One analyst notes that by combining “the high technology of Japan, experience and intermediate technology of Korea and resources of China...the Northeast Asian bloc will easily achieve global competitiveness.”^[29] Then possibly, Korea will achieve its goal of becoming the leading business center in Northeast Asia in the 21st century.

Return to Agenda

^[2]“Balance of Trade Might Ride a Roller Coster,” Business Korea January 2000: 51.

^[3]Chon Shi-Yong , “Kim Expresses Concern About Import Growth,” The Korea Herald (online) 17 February 2000.

^[4]In this paper, the Chinese currency is also referred to as the reminbi.

^[5]1999 trade statistics for Korea are only for the first 11 months of the year.

^[6]Lee Byung-Sun and Park Hyun-Joo, “Korea’s Economic Relations with China,” Korea’s Economy 1998 14 (1998): 106-110. (Published by the Korea Economic Institute of America)

^[7]Kim Icksoo, China’s Accession into the WTO and its Multifaceted Impact on East Asia and the Korean Economy (Seoul: KIEP, 1999) 181-218.

^[10]See “Global Economic Forum: The Latest Views of Morgan Stanley Dean Witter Economists,” 24 February 2000 (www.msdw.com).

^[11]For more information on Korean economic trends, go to www.kisc.org.

^[12]Kim June Dong, “Impact of Foreign Direct Investment Liberalization: The Case of Korea,” Korea Institute for International Economic Policy Working Paper 97-01 (Seoul: KIEP, 1997) 8.

^[14]Kim June Dong, “Inward Foreign Direct Investment Regime and Some Evidence of Spillover Effects in Korea,” Korea Institute of International Economic Policy Working Paper 99-09 (Seoul: KIEP, 1999) 40-41.

^[17]For more information on Korean investment trends in China, see Scott Snyder “Deepening Intimacy and Increased Economic Exchange,”Comparative Connections E-Journal

^[18]For more information on the impact of China’s WTO accession on Korea, see Kim 1999, Chun and Park 1999, Snyder 1999, and Yoo Jin-Seok, “China’s WTO Accession and Its Impact,” The Impact of China’s WTO Accession on the Korean Economy (Seoul: Samsung Economic Research Institute) 1999.

^[19]Marcus Noland, “Prospects for Northeast Asia in the 21^st Century,”(paper presented at the Northeast Asia Economic Relations Symposium, Toyama, Japan, 13 October 1999.)

^[20]Yoichi Yokoi, “Major Developments in Japan-China Economic Interdependence in 1990-1994,” China and Japan: History, Trends, and Prospects, ed. Christopher Howe (Oxford: Clarendon Press 1996) 147-154. For other information on China-Japan relations, refer to the JETRO China newsletter.

^[21]Masayoshi Kanabayashi. “China Toils to Meet Consumer Demand for Japanese Goods.” Asian Wall Street Journal. February 21-21, 2000. 3.

^[23]Yoo Jin Seok, “New Era of Economic Cooperation Between Korea, China, and Japan,” Samsung Economic Research Institute Korean Economic Trends (online), 3.48 (1999) 16.

^[26]See Kim Kihoon, “Korea Falling Behind China, Japan in Trilateral Trade,” Digital ChosunIlbo, 25 February 2000.

^[27]See Marc Castellano, “Postcrisis Japan-South Korea Economic Relations: The Ups and Downs of Trade and Foreign Direct Investment,” JEI Report 13A, 2 April 1999.

^[28]See Cheong Inkyo, “Economic Integration in Northeast Asia: Searching for a Feasible Approach,” Korea Institute of International Economic Policy Working Paper 99-25 (Seoul: KIEP, 1999) 18.