processing trade
2021-07-07
Category:South Korea
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What is the problem with Korea's trade deficit with Japan?The center of the Korean economy is processing trade.In other words, even if raw materials are purchased from Japan, they are sold to third countries with added value due to commercialization, so they are recorded as GDP in Korea.In other words, it's just added value and passed through.It may be trade deficit for example agricultural products imported from Japan and consumed in Korea are known, but they do not know what is wrong with processing trade.
If the cost of raw materials imported from Japan exceeds 50 percent of the cost of the product, Korea's added value will be less than 50 percent.However, this is not a trade deficit, but a cost management issue.In the first place, products that cost more than 50% of raw materials in the manufacturing industry it would hard to exist for lack of competitiveness.
Korea wants Japan to buy more products made from Japanese raw materials because of the trade deficit, but this is also meaningless.If Korea adds value to the cost of Japanese raw materials and Japan buys them, Japan will buy back the raw materials it sells, so there is no profit for Japan .This is not the cause of the trade deficit, but the competitiveness in the Japanese market.
Moon Jae In is a man who doesn't make no sense.
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[related article]
W Cup [Korea] After winning against Portugal, he stepped on -------------------- Excerpt from Seoul Newspaper (Japanese translation)
On the 3rd, the South Korean national soccer team, led by coach Paulo Bentu, suffered a fierce 2-1 win in the third and final match of Group H of the 2022 Qatar World Cup Group League against Portugal, which was held at the Alaiyan Education City Stadium in Qatar. They achieved a come-from-behind victory.
Immediately after the match, the players gathered for a commemorative photo. During this process, Song Min-gyu stepped on the Taegeukgi that was spread on the floor while changing his seat.
Netizens who saw him pointed out that his behavior was inappropriate. Some netizens posted on his social networking service (SNS), saying, ``I know he was happy, but he stepped on the Taegeukgi and took a photo, but please be careful next time.'' While watching the video, I was very surprised and angry.I feel embarrassed before the whole world sees it,'' and ``If you step on the national flag, please apologize first.''
Song Min-kyu posted on his Instagram story, ``After the game, I was so happy that I didn't panic and didn't even realize that I had stepped on the Taegeukgi.I don't think this should happen under any circumstances.'' I apologized.
-------------------- Excerpt from Seoul Newspaper
This country has traditionally trampled, burned, and torn the flags of other countries. Don't you realize that it's a shameful act?
Park Geun - hye's special pardon has been decided. What is Moon Jae - in planning? It's been 4 years and 9 months.
Former President Park Geun-hye, who was sentenced to 22 years in prison, was granted a special pardon on the 24th and will be free from midnight on the 31st. It has been 4 years, 9 months, and 1,736 days since he was arrested on March 31, 2017.
Former President Park expressed her gratitude to President Moon Jae-in. Lawyer Yoo said, ``I apologize to the people for causing so much worry.Also, thank you for your continued support and encouragement.Despite all the hardships, Moon Jae-in decided to be pardoned. I would like to express my great gratitude to the President and the government authorities.I would like to return to my job as a new soldier, concentrate on my treatment, and personally express my gratitude to the people as soon as possible,'' former President Park Geun-hye said.
The longest prison term for a South Korean president was former President Park Geun-hye's 1,736 days.
In August of this year, in the decision to parole the head of the Samsung Group, the opposition party mainly requested that Park Geun-hye be pardoned, but Moon Jae-in refused. Those seeking a pardon had called for Park Geun-hye's release on the grounds that it would eliminate the cause of national division, but the latest decision by the Blue House to grant the pardon is precisely to eliminate the division among the people.
It may be a naive point of view, but it is customary for South Korean presidents to be arrested for some crime once their term ends. Did Moon Jae-in think that Park Geun-hye would be pardoned no matter who the next president becomes? If she was to be pardoned anyway, I would be the one to be pardoned.
Does this mean that he is showing sincerity to the opposition and wants his prosecution to be overlooked? In any case, the 22-year sentence for bribery charges is shocking. This is a Japanese feeling, but since he was sentenced to prison for 4 years and 9 months, it is best that he was released.
Moon Jae-in won the presidential election despite having little political experience due to the impeachment of Park Geun-hye. Why was he pardoned at this time? It is said that Moon Jae-in was the one who sent Park Geun-hye to prison.
The exchange won rate has not stopped falling.The No Japan movement is a campaign to buy domestic products.Nothing will change under the chaebol economy.
South Korea's trade dependence on GDP is more than 70 percent, including the service sector.In other words, domestic demand is low and foreign exchange is directly affected.Even if foreign demand is received, it does not circulate at home and flows abroad.If the person who made the purchase contract increases the dollar by 5% at the time of payment, the payment will increase by 5%.The won-dollar exchange rate is 1,200 won, but it has been hovering around 1,200 won in recent days.
In order to maintain international competitiveness, chaebol companies such as SAMSUNG buy parts in bulk and produce them in bulk to reduce costs and sell them at low prices.In this case, large debts are always carried out and large payments are repeated, and problems arise when the value of the currency changes significantly during that period.This is the so-called default.Under these circumstances, the won's international credit rating has not increased, and South Korean companies can trade in dollars depending on the L/C of Japanese commercial banks.
South Korea experienced two foreign exchange crises in 1997 and 2008.No country will experience two foreign exchange crises in 10 years.In other words, South Korea's industrial form is vulnerable, and in short, it is trading beyond its currency capabilities.
Considering what Moon Jae In wants to do, the real intention is to socialize, control the currency, and stabilize the value of the won.Do you think the boycott is a campaign to buy domestic goods if it is reversed?
South Korea is listed by the FRB as a currency manipulator.
The reason why domestic demand is not expanding is the existence of chaebol companies.The role of chaebol companies in driving the Korean economy is important, but on the other hand, investment in chaebol companies is concentrated and other industries are not growing.In addition to the businesses run by chaebol companies, how can Korean companies grow globally?It can only be done with its own money without investment.
This structure will not change even if there is a boycott Japan.As a currency manipulator, even if it leaves the liberal economy, it will not change.It is necessary for the government to take the lead in fostering domestic demand and to attract investment in what industries to foster domestic small and medium-sized enterprises.The boycott Japan does not mean that South Korean domestic companies' sales will increase.
Moon Jae In's term of office is less than three months, and criticism from his country seems to be gathering.I think it's quite late from Japan view.
[South Korea] If you have the world's highest household debt, you don't have enough disposable income - If you don't spend money, it's just bad manners.
Private/government debt 254%
Household debt is 104.2% of GDP
Global trend of interest rate hikes
Mortgage reduces disposable income
A traveler who just has bad manners
In a statement distributed in advance of the conference, Professor Ham Joon-ho of Yonsei University Graduate School of International Studies, who served as a member of the Bank of Korea's Financial and Monetary Committee, stated, ``Korea's macro leverage (private and government debt) level has expanded to 254% of GDP. ” he pointed out.
The household debt balance has continued to expand for 16 years, reaching a record high of 1,850.9 trillion won (approximately 176.9871 trillion yen) in the April-June 2021 period. According to a study by the Institute of International Finance (IIF), Japan's GDP ratio was 104.2%, the highest among 37 major countries and regions. Incidentally, the countries other than South Korea are followed by Hong Kong (92.0%), the UK (89.4%), and the US (79.2%).
On the 15th, the Federal Reserve Board (FRB), the central bank of the United States, announced the first major interest rate hike in about 30 years. The policy rate will be raised by 0.75% to a range of 1.50 to 1.75%.
Prior to this, South Korea announced that it would raise its policy interest rate from 1.5% to 1.75% in May. The rate was set at 1.5% in April, making this the second consecutive month of interest rate hikes. This will also be a severe blow to those who are burdened with household debt.
South Korea's per capita GDP is approaching that of Japan. According to the 2021 IMF announcement, Japan's price is $39,340 and South Korea's price is $34,801. However, Japan's household debt is around 66-7%.
Housing loans are the largest component of household debt. The skyrocketing price of land in Seoul continues to skyrocket, forcing many to borrow large sums of money to purchase apartments. As a result, even if GDP and wages rise, most of the money goes toward repaying household debts, resulting in less disposable income. I don't have any money to spend.
Even after salaries are paid, the money goes straight through the tunnel and is returned to financial institutions, where it is returned to the market. This is the reality of GDP per capita in the Korean economy.
As the coronavirus pandemic begins to subside and overseas travel is gradually lifted, travel to Japan is expected to become a boom again in South Korea. It's not that they like Japan. The above reasons are largely responsible for why Japan is chosen as a nearby travel destination.
And just because you come to Japan doesn't mean you have to spend money. There are quite a few groups that find faults, point them out, and complain to each other. It is said that Korean tourists just have bad manners.
Death toll from Halloween Shogi chess accident in Seoul rises to 151 - Different countries respond differently to similar accidents.
Deadly accident occurs on Halloween in Seoul
Akashi fireworks festival accident for which police were held responsible
Shanghai accident started with suspicious report
China's return to people's responsibility
How will South Korea sum up this issue
The number of people killed in a shogi accident during Halloween in Seoul has increased to 151. This is the worst accident in terms of man-made disasters. This accident reminds me of the Akashi fireworks festival accident in Japan and the New Year countdown accident on the Shanghai Bund in China. Shogi accidents occur when players are pushed from behind in a crowded crowd, or when they step on someone else's foot and lose their balance. This chain causes a major accident.
This also happened during the Akashi Fireworks Festival, and 11 people died. However, it is impossible for the people who disrupted that arrangement to be held responsible. Problems with the police and security were investigated day after day, and in the end, a civil court ordered Hyogo Prefectural Police and the security company to pay damages. The conclusion is that it was foreseeable and that the necessary measures were not taken. In the criminal trial, one police officer and one security company were sentenced to 2 years and 6 months in prison, and 3 city employees were sentenced to 2 years and 6 months in prison, suspended for 5 years was found guilty.
Next, regarding the incident in Shanghai Bund, I was in Shanghai on the day of the accident. A Chinese person I spoke to the next day asked me, didn't you go to the Bund last night? I found out when I was asked. According to the news reports after the accident, 36 people were said to have died. From then on, it turned out to be a complete lie. On New Year's Eve, Shanghai was in a state of chaos, with people rushing to the point where it was difficult to walk, not only on the Bund, but also everywhere, including the station premises, and it would have been no surprise if an accident occurred anywhere. . If it was an accident during the New Year's countdown on the Bund, it was clear that 36 people would not have been there.
Afterwards, I was looking into how this incident was summarized in China, and came across an article called Expert Opinion. "Increase public awareness of safety, avoid danger, and avoid crowded places." In other words, public responsibility for gathering too much. It was not intended to hold the government or police responsible.
There was clearly a problem with the accident in Seoul, and it was a catastrophe in which many people died. Maybe it's because it happened right after the accident, but when I look at articles from South Korea, there doesn't seem to be any complaints about the lack of police or security. In Japan, a ruling after the accident increased the responsibility of the police and security companies for events where large numbers of people gather, resulting in an increase in the safety of citizens.
Shogi falling accidents occur in various countries, but the way each country views and deals with the problem is completely different. How will South Korea summarize this accident?