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Korean Economy and New Investment opportunities. April 24, 2008. Ministry of Knowledge Economy. www.mke.go.kr. I. The Recent trend of Korean Economy. www.mke.go.kr. 2. 1) Key Economic Indicators (1). GDP Growth Rate. Labor Disputes. Unemployment Rate. Consumer Price Index. %. %.

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Korean economy and new investment opportunities

Korean Economy

and

New Investment opportunities

April 24, 2008

Ministry of Knowledge Economy

www.mke.go.kr


Korean economy and new investment opportunities

I. The Recent trend of Korean Economy

www.mke.go.kr

2


Korean economy and new investment opportunities

1) Key Economic Indicators (1)

GDP Growth Rate

Labor Disputes

Unemployment Rate

Consumer Price Index

%

%

8

10

7

8

6

6

5

4

4

3

2

2

07

07

07

07

02

02

02

02

03

03

03

03

04

04

04

04

05

05

05

05

06

06

06

06

1

400

%

5

300

4

200

3

100

2

KOREA

OECD

1

0

7.1

7.0

6.9

6.6

7.0

3.7

4.7

3.7

3.3

3.5

5.1

5.0

3.6

3.2

4.2

3.1

1.6

2.9

2.6

3.2

2.0

KOREA

OECD

320

322

462

181

3.6

3.5

138

2.8

2.8

108

2.5

2.2

Labor disputes

(Unit: cases)

3


Korean economy and new investment opportunities

2) Key Economic Indicators (2)

Exchange Rate (Won-Dollar)

Exports/Imports

Foreign Exchange Reserves

Debt-Equity Ratio

371.4

Export: Import:

325.5

%

$bn

356.8

284.4

300

250

253.8

195.6

309.4

200

144.7

250

131.3

114.0

110.9

150

105.3

261.2

193.8

100

162.5

200

224.5

50

150

178.8

07

06

07

07

02

02

01

02

02

03

03

03

04

04

03

04

05

05

04

05

05

06

06

06

0

152.1

Won/Dollar

$bn

262.3

250

239.0

1300

1200.4

210.4

200

199.1

1197.8

1200

150

155.3

1043.8

1100

100

1024.0

121.4

956.0

50

1000

929.3

900

4


Korean economy and new investment opportunities

3) Direct Investment (FDI)

FDI Trend in Korea(1991- 2007)

Financial Crisis

Notification

Arrival

10.5

(US$ billion)

9.0

20

15

06

07

10

5

0

91

92

93

94

95

96

97

98

99

00

01

02

03

04

05

FDI increased after the financial crisis

2004, FDI rebounded with Korean government’s efforts after decreasing 4 consecutive years from 2000 to 2003

5


Korean economy and new investment opportunities

2. The Investment Opportunity in Korea

www.mke.go.kr

6


Korean economy and new investment opportunities

1) Fully Open Market

$ 900bn.

4th in

Asia

30

50

50

60

Stock market size

$ 188bn.

Mar. 2008

2000

Foreign shares of major companies(%)

80

7


Korean economy and new investment opportunities

2) Dramatic Changes

Corporate

Governance

Closed

Decision-Making

Open with Bigger Voices

Dec. 1997

2008

B+

Credit

Rating

STANDARD

&POOR’S

A

Ba1

A2

B-

A+

$20,000(2007)

$7,300(1997)

GNI per

capita

8


Korean economy and new investment opportunities

3) World Class Industrial Leader

Autos

Steel

Semi-

conductor

Mobile-

Phone

Ship-

building

TFT-LCD

No. 1

(Market Share 39%)

No. 5

(Production Capa)

No. 5

(Production Capa)

No. 3

(Market Share 10%)

No. 2

(Market Share 21%)

No. 1

(Market Share 38%)

9


Korean economy and new investment opportunities

4) Best IT/R&D Environment

Connected everywhere, all the time

Ubiquitous IT

Patent productivity #2 (IMD)

Technology Infra #6(IMD)

Science Infra #7 (IMD)

R&D Powerhouse

80 % College Entrance Rate

100,000 Science Majors Annually

Excellent Human Resources

10


Korean economy and new investment opportunities

5) Gateway to Asia

50 cities with populations of

1 million+ within 3 ½ hrs

East Sea

Beijing

(1 ½ hrs)

Tokyo

(2 hrs)

Shanghai

(1 ½ hrs)

Asia

Hong Kong

(3 ½ hrs)

Guangzhou

(3 ½ hrs)

2/3

Taipei

(2 ½ hrs)

World Population

Manila

(4 hrs)

1/5

Global GDP

Average growth rate(Asia excluding Japan)

8.7 %

World: 5.2%, OECD: 2.7%

11


Korean economy and new investment opportunities

6) FTAs

ASEAN, Chile, EFTA, Singapore and USA

Signed

In final stage

EU

China and Japan

Under consideration

12


Korean economy and new investment opportunities

Having Concerns?

Labor Issues

North Korea

  • Unionized labor: 10.3%

  • Labor unions more cooperative than ever

  • Close cooperation with allies

  • South-North dialogue based upon “principle and flexibility”

13


Korean economy and new investment opportunities

“Business-Friendly”

25%

Regulation

overhaul

Tax cut

22%

20%

Living Conditions

Improvement

  • Lowering entry– exit barriers

  • Drasticchange in corporate tax rate

(2008)

(2012)

  • International educational facilities

  • State-of-the art hospitals

14


Korean economy and new investment opportunities

Success Story

  • 20% of GM’s global production

  • “Daewoo Motor becomes a bright spot for GM” - NY Times -

  • The first & only Asia-Pacific Headquarter

  • “Korea is the hot-bed of e-commerce in Asia” - Meg Whitman, CEO, eBay -

15


Korean economy and new investment opportunities

Thank you !

Broad industrial spectrum

- Computer, Shipping, Mobile, Auto…

- R&D, e-business, test bed, design…

[email protected]

16


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