Business Report on South KoreabyThomas FrippforTaylor SteepBBB4MMonday, January 22, 2018Table of ContentsGeography 3History 3Modern Politics 4News Story 4Economy 5Free Trade Agreements 7 South Korea and Canada’s trading relation 7Working conditions 8Immigration 8Korean Company: Samsung 8Samsung News story 9The Future of South Korea 10Works Cited 11Geography South korea is a country located in East Asia. It is situated on the southern section of Korea’s peninsula. The country borders on North Korea to the north, borders on the East Sea of Japan to the East, borders the East China Sea to the south and borders the Yellow Sea to the West. The country is made up of 5 provinces. Tthe province with the largest population is Gyeonggi with a population of 12,239,862, which makes up a large portion of South Korea’s 51.25 million people.
Korea’s capital is Pyongyang which is also the largest city. The other major cities are Seoul, Busan, Incheon and Daegu. HistorySince the 1900s there have been two events that have been the most significant to Korea’s history. First, the Japanese occupation which took place between 1910 and 1945. In 1910 the treaty of annexation was signed marking the beginning of the colonial rule that would last 35 years and Korea’s annexation to Japan. The Governor General of Korea and the chief colonial administrative unit in Seoul, had the power to control cultural, social, political and economic activity. There were many protests against this treaty, The first was the protest on march 1st 1919 were over a million people protested against the colonial rule.
The colonial rule was terminate August 15 1945, once it was liberated it was separated into North and South Korea. South Korea was under American occupation and North Korea was under Soviet occupation which were formally proclaimed in 1948. The second major event was the Korean War which was a civil war spanning from 1950 to 1953. Modern PoliticsSouth Korea is a democratic republic made up of three major branches, the executive, legislative and judiciary branches. South Korea operates at the national level and has a centralized government. The highest and most powerful position of the government is the president who is currently Moon Jae-In. The government has 17 ministers who are chosen by the president.
They report to the Prime Minister of South Korea who is Lee Nak-yeon. News Story”South Korea’s Winter Olympics risk skidding off-piste”This news article I found discussing the 2018 winter Olympics that will be held in Pyeongchang, South Korea. It was discussing the concern for the success of the Olympics in terms of profit and attendance.
The first issue discussed was the low number of ticket sales. Out of the 1.1 million tickets only around 30% have been sold. This could be due to a recent K-pop concert held at the stadium that left attendees with hypothermia, which raised great concern about how suitable the stadium will be for the Olympics. Contrary to this the organisers have said that it will create potential for tourist to view South Korea as a snow sport destination and bring in 60 billion over the next ten years. Another defense to these concerns came from Kim Jae-youl, executive vice-president of the Pyeongchang Organising who said “I can tell you this with confidence that Koreans are known to be late ticket buyers”. Another article I found brought up other issues with the upcoming Winter Games.
The article was titled “South Korea Worried About High Cost of Olympics”. It discusses potential issues such as the utility of the stadiums in the future and the lack of benefits. One point was brought up is that when Pyeongchang was chosen for the Olympics in 2011 it was expected to cost $7 or $8 billion dollars. But now as it approaches it is expected to cost $12.9 billion dollars.
Many local residents of the province Gangwon say that the government has ignored many of their needs and is instead spending their money on the Olympics instead. The article also brought up the fact that other than the Olympic ceremonies there is very little use to many of the arenas and infrastructure. Due to the fact that the town of Pyeongchang only has a population of 40,000 and the Olympic stadium seats 35,000 it would be very difficult to utilise these facilities to their potential.EconomyGDP$1.8 trillion2.6% growth3.0% 5-year compound annual growth$36,511 per capitaSouth Korea lacks many natural resources. In the past it had large forests, but now most of the lumber has been taken, especially in cities.
They are trying to combat this with a reforestation program that is being carried out. Some of the resources that the country lacks is Tungsten, molybdenum, coal, iron ore, limestone and graphite. Some of south Korea’s strengths are that it has a diversified industrial base, it is a leader in cutting edge and high end electronics, it has a very successful education system, they have a increased korean investment in Vietnam, china and India and they have a high resource and development spending.Some of Korea’s weaknesses are that they are very dependent on natural resources and could face issues if the prices get too high. Also, they have a high level of small business and household indebtedness. Another issue is the instability of the neighbouring country North Korea, which could pose an issue due to the nuclear and military resources of North Korea as well as the instability of the government.South Korea’s largest industry is the service industry (department stores, supermarkets and store chains) which makes up around 55% of South Korea’s GDP.
The second largest industry is the manufacturing sector, making up 40% of South Korea’s GDP. SPecifically the manufacturing of electronics, cars and ships. Samsung and Hyundai are both responsible for a large part of this manufacturing.A twenty year trend of South Korea from 1998 shows that the GDP per capita has nearly doubled.Top five importsTop five ExportsMineral fuels including oil: US$81.7 billion (20.1% of total imports)Electrical machinery, equipment: US$134.3 billion (27.
1% of total exports)Electrical machinery, equipment: $75.1 billion (18.5%)Vehicles: $62.7 billion (12.6%)Machinery including computers: $46 billion (11.3%)Machinery including computers: $58.
3 billion (11.8%)Optical, technical, medical apparatus: $17.5 billion (4.3%)Ships, boats: $33.
2 billion (6.7%)Vehicles : $15.2 billion (3.8%)Plastics, plastic articles: $27.7 billion (5.6%)South Korea’s top three trading partners are China (25% of Korean exports), United States (13.5%) and Hong Kong (6.6%).
Free Trade AgreementsOne of Korea’s largest most significant trade agreements is the KORUS trade agreement, which was made with the United States of America. It was signed in 2011 and since then it has gone through tariff cuts and eliminations. South Korea holds a trade surplus with the United States.South Korea also has a trade agreement with Canada (CKFTA), which in fact was Canada’s first free trade agreement with an Asian country. South Korea is the seventh largest trading partner of Canada as well as their third largest in Asia. It is expected to raise Canada’s GDP by $1.7 billion and bring about an increase of South Korea’s imports from Canada by over 30%. A very significant impact on the market in south korea is the luxury market, which was valued at $8.
3 billion in 2013. South Korea and Canada’s trading relationSouth Korea’s Import/Export with Canada South Korea is Canada’s seventh largest trading partner in the world. In 2009 it was the seventh largest export and import destination. For a long time it has been Canada’s third largest trading partner in Asia, following China and Japan. In 2009 South Korea’s bilateral trade with canada amounted to $9.
4 billion, consisting of 3.5$ billion of Canadian imports and $5.9 billion in exports to Canada. The products being imported from Canada were mainly resource based goods, making up 72% of all imports from Canada in 2009. Coal was the largest resource based import being valued 1.1$ billion, which made up 30% of all imports from canada that year.
Most of South Korea’s exports to Canada where manufactured goods making up 86% of total exports to Canada. The largest of which being cars, at a value of 1.5$ billion.
It is also worth noting that Canada holds a slight trade surplus with Korea.Working conditionsSouth Korea’s legal weekly duration is from 40 to 44 hours per week. They also have a minimum age of retirement of 60 years old. The minimum wage is 6,470 KD (6.08 USD) and the average yearly revenue is 36,354 USD. There are also a variety of social contributions, such as the national pension (4.5%), health insurance (3.2%) and accident and employee insurance.
Another notable aspect of the working conditions in South Korea is that the percentage of working males was at 84.61% in 2017 and the percentage of females working in 2017 was 50.16%.ImmigrationSouth Korea has around 1.58 million foreign residents. The largest of which come from China, making up over a million of the foreign residents. In 2016 they were bringing in 2.6 immigrants for every 1000 people.
Many people immigrating to South Korea are working on farms and in mines. You must get a visa to work in South Korea.Canadians going to the Republic of Korea to work, teach or model (part-time or full-time, paid or unpaid) must enter the ROK using the appropriate work visa. Changes of status from any other visa status to a work visa are not granted within the country. Any foreigner who begins work without the appropriate visa is subject to arrest, costly fines and deportation. Persons working without a valid work-permit, who have a contractual dispute with his/her employer, have little or no entitlement to legal recourse under South Korean law.
Korean Company: SamsungA company that operates in Canada and South Korea is Samsung. It was started in Daegu South Korea, in 1938 and since then has become one of the largest companies in the world. The companies products are sold internationally and has 83 subsidiaries in Korea and over 1000 internationally. They’re most known for their technological products that range from smartphones to washing machines. There are three CEO’s of the company, who are Kwon Oh-hyun, Yoon Boo Keun and Jong-Kyun Shin.
One of the CEO’s Kwon Oh-hyun went to Seoul National University where he got a B.S in electrical engineering. He has been working at Samsung since 1985, some of his notable achievements at Samsung are that he led the creation of the 64MB DRAM.Samsungs operates its company with three different divisions. The first division is the Consumer Electronics, which manufactures printers, color television, laundry machines, monitors and other items. The second division is the Information technology and Mobile Communications, which manufactures network systems, digital cameras and handheld phones.
The last division is the Device Solutions division which manufactures display and semiconductor parts, such as DRAM’s, film and flashes. All of these products are sold domestically and internationally, through several means. Such as retail stores, Samsung stores and online.Samsung’s products are sold at retail stores in Canada by other companies such as Best Buy or Walmart. They also are sold at Samsung stores that are scattered around Canada. The head office in Canada is in Mississauga Ontario, which is often considered the Canadian equivalent to the technology hub of silicon valley in the United States. Samsung news StoryThe current news story I found regarding Samsung in Canada was about Samsung Canada’s plan to open up a sixth Samsung Experience Display Store, which will be the largest to date.
It was titled “Samsung Canada To Transform the Retail Brand Experience”. The Experience Display Store is set to showcase a variety of new Samsung Products. Some of the most anticipated displays were a full Samsung kitchen, new virtually reality system and the new lineup of new smartphones and tablets.
The future of South KoreaI believe that in the next 20 years South Korea will see great success as a country economically and socially. It has some of the most cutting edge technology sectors with many companies sprouting from it. Such as Samsung which is one of, if not the largest technology company. Passing Apple on the 2013 fortune 500 list with profits that year of $20.6 billion.
Being at the head of the technological market is very important as it is a market that is bound to grow significantly in the future. Another reason I think South Korea will be successful is because of the increase of the GDP per capita over the last 28 years. Which went from 12000 in 1998 to 35000 in 2018.Samsung will become one of the largest companies internationally as their products will remain to been usefull and wanted (smartphones, computer). Also they might find success in some of the new markets that they are trying to branch out into.
Such as AI (artificial intelligence).