SOUTH KOREA
RISKS & BENEFITS
- North Korea remains a major threat - Relatively high wages - Future ageing society - Low investment freedom - Limited natural resources and raw materials - Steel, textile and naval industry affected by Chinese competition - Relatively low export on apparel and textile industry
- Strong foreign relationships - Strong economic fundamentals - Highly educated workforce - Robust telecommunication sector - Excellent infrastructure for innovation - Leader in high-quality electronics - Favorable tax policies - Strong governmental intervention to protect environment - Manufacturing high-tech textile
COUNTRY TRAITS
Republic of Korea Capital: Seoul
Located in Eastern Asia, southern half of the Korean Peninsula bordering the Sea of Japan and the Yellow Sea. ( 37 00 N, 127 30 E )
Total: 99,720 sq km Land: 96,920 sq km Water: 2,800 sq km Coastline: 2,413 km
49,115,196 (July 2015 est.) Median Age Total: 40.8 years Male: 39.2 years Female: 42.2 years (2015 est.)
Labor Force: 26.27 million (2014 est.) Agriculture: 5.7% Industry: 24% Services: 70.4% (2014 est.) Minimum Wage: 5580 won / h Korean, English (widely taught in junior high and high school)
Currency: South Korean won (KRW) Exchange Rate: 1,132 per US dollar
Time Zone: UTC+09:00
(Sourced from CIA)
COUNTRY STABILITY
SOCIAL
South Korea is located in the south of the Korean peninsula, which is one of the most homogeneous areas in the world both ethnically and linguistically.The population of the South Korea is now around 49 million, and about three-fourths of them live in the urban areas. Due to people in the age of 15-64 occupy the largest age distribution ratio of 73%, South Korea is considered as the country has powerful labor force. In addition, the Human Development Index (HDI) which used to measure a country’s quality of life has ranked South Korea in the high human development category at the 30th out of 175 countries (2015 Country Review).
ECONOMIC Since the 1960s, South Korea has transformed from the agricultural economy to the industrialized and high-tech modern economy. Today, South Korea is recognized as the most industrialized OECD (Organization for Economic Co-operation and Development) country, and it is among the world’s 20 largest economies as well. The GDP of 2014 is $1.781 trillion with a 3.3% real GDP growth rate and $35,300 GDP per capita (CIA). Otherwise, South Korea is classified as a high income country by the World Bank. The currency is South Korean Won (KRW), and the current exchange rate is 1,053KRW equals to 1 dollar. Economic Snapshot - Exports higher than 96.22% of all other countries (2014) - Unemployment rate lower than 89.89% of all other countries (2014) - Inflation rate lower than 65.22% of all other countries (2014) Inflation rate (consumer prices): 1.3% (2014 est.) - GDP per capita higher than 82.90% of all other countries (2014) - GDP growth rate higher than 55.73% of all other countries (2014) - FDI, net inflows higher than 85.49% of all other countries (2014)
(Sourced from globalEDGE)
The snapshot graph indicates a stronger economy. On the other hand, the major industries in the country are electronics, telecommunications, automobile production, chemicals, shipbuilding, and steel. So the performance of the current rate will not cause a huge effect on the apparel and textile industry.
POLITICAL Chief of state: President PARK Geun-hye (since 25 February 2013)
South Korea is relatively pretty stable in politics. According to a report Sunday by the Eurasia Group, a New York-based research company, South Korea scored 74 out of 100 points in its Global Political Risk Index. However, South Korea’s relationship with North Korea has been one of the key political issues for over a decade. According to the 2015 country review, South Korea was ranked its Political Rights and Civil Liberties of freedom of both score of 2 out of 1-7 range which means the freedom status is pretty free. Furthermore, the R.O.K. seeks to build on its economic accomplishments to increase its regional and global role. It is a founding member of the Asia-Pacific Economic Cooperation (APEC) forum. In addition, the Republic of Korea maintains diplomatic relations with more than 170 countries and a broad network of trading relationships. The World Bank (govindicators.org) provides data for that indicator in South Korea from 1996 to 2013 and for the USA from 1996 to 2013. During these years, the average value in South Korea was 0.45 points compared to 0.35 points in the USA.
ENVIRONMENT Overall, as South Korea’s economy has developed, the environmental awareness has become increasingly important. The regulation and protection of the environment in South Korea is under the jurisdiction of the Ministry of the Environment, and it also has the non-government organization such as Korean Central Council for Nature Preservation (KCCNP). The country does not have many natural resources. In order to benefit the environment, the government has set up policies, directives, as well as promoted environmental education in schools and business communities. However, it was ranked the 8th country in the world for the Greenhouse Gas emissions (2015 Country Review).
LEAD-TIME OF PRODUCTION 8 export days, 7 import days
HOLIDAYS New Year’s Day / January 1 / 1 day off Korean New Year / 1st day of 1st lunar month / 3 days off Independence Movement Day / March 1 / 1 day off Children’s Day / May 5 / 1 day off Buddha’s Birthday / 8th day of 4th lunar month / 1 day off Memorial Day / June 6 / 1 day off Constitution Day / July 17 / no day off Liberation Day / August 15 / 1 day off Midautumn Festival / 15th day of 8th lunar month / 3 days off Armed Forces Day / October 1 / no day off National Foundation Day / October 3 / 1 day off Hangul Day / October 9 / 1 day off Christmas / December 25 / 1 day off
HOW TO CONDUCT BUSINESS IN THE COUNTRY Country code / Dialing code: 82 Telephone system: General assessment: excellent domestic and international services featuring rapid incorporation of new technologies Domestic: fixed-line and mobile-cellular services widely available with a combined telephone subscribership of roughly 170 per 100 persons; rapid assimilation of a full range of telecommunications technologies leading to a boom in e-commerce International: numerous submarine cables provide links throughout Asia, Australia, the Middle East, Europe, and US. (CIA)
Cultural Insights - Korean men tend to greet each other with a slight bow, sometimes accompanied by a handshake, while maintaining eye contact. - Elderly people are very highly respected in Korean culture. - Korean males possess higher social status than Korean women. - Physical contact is inappropriate with older people, opposite sex, or who are not good friends and family. - Smiling and laughter does not always denote amusement and pleasure - Koreans are very conscious of dignity and self-respect. - Modesty is another cardinal concern in Korea - It is customary to remove one’s shoes when entering indoor places. - When giving or receiving a gift, one should always use both hands.
APPAREL & TEXTILE INDUSTRY
Overall, South Korea’s exports in August suffered their biggest fall in six years, and exports would likely continue shrinking this month before seeing a slow recovery in the fourth quarter. said the trade ministry. However, the apparel and textile industry in South Korea only occupies very small percentage compare to other export categories. The predominant view is that ‘textile Korea’ has lost its footing as the global textile market is inundated with low-priced textile products made in China and Southeast Asia. Thus, Korean textile companies have spared no efforts to develop high-tech products through repeated innovations, which allowed many of their products to dominate the global market. In addition, this will benefit the activewear company like us to develop new high-tech material accessories. Some of the Apparel & Textile Export data: Knitted Fabrics 0.73 % Manmade Staple Fibers 0.35% Impregnated Textiles 0.24 % Apparel: Non Knit 0.18 % Apparel: Knit 0.17 % Cotton 0.14 % Footwear 0.09 % Wool 0.01 %
SUPPLIERS LIST
P.S.K Products Ltd.
79 5 Milliana Ii 911, Karak Dong, Songpa Ku, Seoul, South Korea +82 82-2449-5272 Contact name: Andy, andy@pskbag.cn Top 3 customers: The Outdoor Recreation Group Evereast Trading Inc. Coppel Corporation
Asg International Corp.
http://www.asgglobal.com Bucheon Techno Park 304-1006, Bucheon City, Kyung gi-Do, South Korea +82 32-654-6544 Top 3 customers: Stm Bags Llc Easton Technical Products Inc. Fox Head Inc.
Neocase Inc.
Room 1150, U-In Archrium Vill 2-Cha, 746, Janghang 2-Dong, Ilsandong-Gu, Goyang-Si, Gyeonggi-Do, South Korea +82 31-929-7373 Contact name: Kim Ji Sun Top 3 customers: Yak Pak Inc. Targus Inc. Agron Inc.
TRANSPORTATION Mediterranean shipping company
Busan, SK (KRPUS) to Long Beach, US (USLGB) transit time: 11 days
ZIM
Busan, SK (KRPUS) to Long Beach, US(USLGB) transit time: 19 days
CONTAINER COST (From busan, SK port) To Savannah, US: $2,930.08 - $3,238.51 To Long Beach, US: $2,796.28 - $3,090.62 To New York, US: $3,057.52 - $3,379.36
Free trade agreement between the United States of America and the Republic of Korea (KORUS FTA) Signed in June 2007, The agreement will abolish 95% of each nation’s tariffs on goods within five years, and also create new protections for multinational financial services and other firms. In addition, United States is South Korea’s second-largest trading partner. Asia Pacific Economic Cooperation (APEC) Founding member of the APEC, and this promotes free trade throughout the Asia-Pacific region. Association of Southeast Asian Nations (ASEAN) It also has participated in ASEAN plus three summits along with Chinese and Japanese leaders to discuss economic and security issues with the ASEAN countries.
TRADE AGREEMENTS
REFERENCES Compare South Korea and USA Political stability index (-2.5 weak; 2.5 strong), Web, http://www.compareallcountries.com/South-Korea/USA/wb_political_stability/ Central Intelligence Agency. Web. https://www.cia.gov/library/publications/resources/the-world-factbook/geos/ks.html CountryLine, South Korea Country Profile. July2013, p1-78. 78p. Print. CountryWatch, South Korea Country Review. 2015, preceding p1-389. 400p. 2015. Print. Panjiva. Web. panjiva.com South Korea: Government, globalEDGE. Web. http://globaledge.msu.edu/countries/south-korea/government South Korea Minimum Hourly Wages 1989-2015. Web. http://www.tradingeconomics.com/south-korea/minimum-wages World Freight Rate. Web. http://worldfreightrates.com/freight
OUDULIN CHEN FASM 420