By Don’t you just love it when a protectionist country (Korea) gets slam dunked by another protectionist country (China). What’s good for the goose is good for the gander. Love it!
The Chinese government has stopped importing cars made by Hyundai Motor and Kia Motors alleging violations of monopoly and oligopoly laws. According to the automobile industry on Wednesday, the Chinese government accepted a complaint by an association of the Chinese automobile dealers and stopped issuing import licenses for Hyundai and Kia cars. The Chinese dealers argued that the two carmakers forcefully allocated excessive quotas for dealers.
… If the companies fail to win more import licenses, it will affect sales of luxury sedans, all of which are produced in Korea. Hyundai and Kia export about 1,500 and 800 cars per month, and losses would be about W50 billion (US$1=W1,240) a month. The move by the Chinese government comes under monopoly and oligopoly laws that began to be fully enforced from July this year,?an industry insider said. The aim is to protect China’s own industry and to tame major foreign carmakers doing business in China. (Source: Chosun Ilbo.)
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12:22 am on October 16th, 2008 1
I was just reading that article and wondering if LMB will do anything to retaliate? I doubt it. The second thing I was wondering was whether if a President Obama would be willing to do the same thing?
8:50 am on October 16th, 2008 2
I haven't been following Korea the past couple of weeks due to the US election, so I don't know what South Korea did to piss China off, but this sounds like The Great Garlic War.
In the late 1990s and early 2000s, some South Koreans were eagerly looking forward to an Asia Rising – like China's growing power would boost the region's geopolitical muscle – or just simply liking the idea of the US having someone strong enough to stick its thumb in Uncle Sam's eye.
But, China has shown a willingness to thump South Korea on the head hard like this when it wants South Korea to cave in quickly to something China wants.
9:49 am on October 16th, 2008 3
I believe China's domestic car manufacturing industry is largely comprised of joint ventures with GM and VW. I thought the occasional Sonatas on the streets were joint venture products, too, but apparently not. Perhaps the restriction is aimed at forcing Hyundai and Kia to build factories and transfer technology.
11:19 am on October 16th, 2008 4
Good lord. Posts like these are typical of the short-sighted schaudenfreud that infects expat commentary on Korea.
So what that at this particular juncture China did something to level a hit at Korea's exports to China? The type of gloating that's going on forgets that China and South Korea still have a deep, mutually reciprical, and institutionalized trade regime. Folks seem to forget that China is South Korea's number trading partner, that South Korea-last time I checked-is China's third largest source of FDI, that just a few years ago commercial exchange between the two countries broke the $100 billion threshold, and that right after the US and South Korea come to an agreement of an FTA in April of 2007, Premier Wen Jiabao and his advisors began looked into and eventually announced that they would like to seek an FTA with South Korea.
Just cause there's one rotten tree in the forest doesn't indicate that the whole forest is dead.
1:18 pm on October 16th, 2008 5
Sonagi:
Good insight. China has long been either trying to steal foreign technology or coerce others into providing it for them.
What I see is all of the foreign companies that have tripped over themselves, trying to capture the China market, some day being told to pack sand, as their companies have now been nationalized.
3:03 pm on October 16th, 2008 6
Everybody,
What is the typical hakwon monthly salary these days?
Calebrisi,
"Just cause there’s one rotten tree in the forest doesn’t indicate that the whole forest is dead."
Show me where anyone has come close to remotely hinting that this is the case, please.
10:52 pm on October 16th, 2008 7
USinKorea,
I would say comments along the lines of China “thumping” South Korea’s “head” or South Korea “caving” are all pretty good indicators of the zero-sum myopia in which folks like you view this whole thing. I gave you the statistics that clearly belie your characterization of the China-ROK trade relationship and hence this one incident doesn’t even amount to waiting room chit-chat let alone a blog post.
Then again, you’ll probably say that such isn’t the case. That I’m twisting your comments. That this is the reason I’m being “moderated”. Most likely we’ll go through the usual tit-for-tat where you give your tendentious expositions, I shoot it down, you again accuse me of twisting your words, and then I get blocked from commenting on the thread.
To be honest, it’s really pathetic that you resort to such things. But then again I shouldn’t be suprised. Actions such as I’ve just outlined are usually the resort of individuals who attempt to paper over their confused thinking and inability to marshall precise language.
9:26 am on October 17th, 2008 8
#7
So, China did not "thump" SK "on the head" in the Great Garlic War?
The deal gave Korea advantages in chemical and IT products in China's market (where Korean business was already making a lot of money) and gave China advantages in agro-fishery sectors in Korea where its products could do well.
SK tried to keep the terms secret for a long time but when they broke, the usual pressure groups and media supporters in Korea screamed bloody murder – South Korea's government started talking about renegociations and what not…
…and China immediately slapped massive prohibitive tariffs on the products South Korean business was making a lot of money with.
But — you are upset with my characterization of that as a "head thumping".
And upset with my characterization of "caving" — when after the massive tariffs were imposed, the Korean press suddenly changed its tune about needing to renegociate the deal as did the South Korean government….
That is what you point at to justify your out-of-hand, knee jerk (most likely racially based) dismissal of what expats here have to say?
I asked you to give us specifics because I wanted future readers to see more plainly —
— what you have to offer – (often) – is nothing more than knee jerk reactionary diatribes dismissing targeted criticism of aspects concerning Korea as Korea-bashing.
And you back this up with personal attacks while trying in the same breathe to puff yourself up as some kind of intellectual above such things.
That is why you were put into moderation, though I went on record as saying I'd rather you have the freedom to [DELETED BY EDITOR]
Ed Note: [Please no name calling]
9:33 am on October 17th, 2008 9
I forgot to add —- you use the typical strawman argument – like claiming my use of "thumping" on the garlic war was some totalizing claim that China and SK have little to no trade with each other.
Yes. You were twisting my words. I am confident the majority of future readers will see that – whether they have Korean blood in them or not.
9:37 am on October 17th, 2008 10
For other readers, I read a couple of articles on the new trade dispute, the one this original article talks about, and it does not sound like it is similar to The Great Garlic War.
Nothing I've read in the Korean papers on this current issue characterize China's action as a reaction to some move by South Korea to restrict Chinese access to sectors of the Korean market or renege on a signed trade deal. But — I've only read maybe two sources so far….
9:44 am on October 17th, 2008 11
I'm sorry USinKorea, the statements you wrote in comment #9 just proves what I was saying, mistaking the tree for the forrest.
I provided you with the stats that shows the 25,000 ft. view of China-ROK trade relations. Yet you continue to harp one on teensy bit of that panoramic view. Much like your post on Roh Moo Hyun and anti-Americanism a few months ago.
[DELETED FOR NAME CALLING]
9:44 am on October 17th, 2008 12
A quick check of Dave's ESL forum of about 3 hakwon positions seems to show the average monthly wage is 2.0-2.4 million won. That is up a million from around the 2002 period – about the last time I can remember looking.
9:47 am on October 17th, 2008 13
Furthermore, if you had read the rest of that article from the Chosun, or even cared to consider it in your explanation, you'd have come across the statement from the Hyundai-KIA official who basically said that this would blow over.
Finally, I criticize Korea when the evidence warrants. I don't go searching into every nook and cranny simply to indulge myself in confirmation bias.
9:49 am on October 17th, 2008 14
Also, if I brought "animosity" into this argument I apolgize for nothing.
Given the homogenous nature of views here, I don't see how a little cacophony would hurt in the dulcet that you've created in this echo chamber.
12:26 pm on October 17th, 2008 15
@15
I like the metaphor of the echo chamber. It is a very vivid use of imagery. I will have to put it to use myself at some point. However, I am at a loss to understand how you are using the word “dulcet” in your concluding sentence. As you know, it is an adjective and sometimes an adverb, which generally means sweet to the taste or pleasing to the ear. Perhaps it would have been better to say, “…I don’t see how a little cacophony would hurt in the dulcet ‘atmosphere’ that you’ve created in this echo chamber.”
2:00 pm on October 17th, 2008 16
#4…#4…has anybody seen #4???
2:00 pm on October 17th, 2008 17
OK Calebrisi. I'm sure you will keep telling us about that big old forest as you dismiss the very idea of looking at trees — by throwing out your constant strawman that the ignorant expats continue to insist the tree is the entire forest. Yes, that is twisting what I and others generally offer.
2:14 pm on October 17th, 2008 18
#17
If I am getting your point right — I'd say if Calebrisi wasn't so habitual in his strawman default argument, he might have answered my #6 by pointing to Kalani's use of the term "protectionist" to China and Korea and then back at his statements of the amount of trade between those countries. The discussion could have then gotten into where protectionist elements in Korea and/or China and how well (or poorly) the protectionist label fits.
Instead, we get the default strawman and arrogant insults.
However, as long term readers here and in the K-blogsphere would likely know, Kalani would not be stupid enough to say that either South Korea or China were "complete protectionists" – like perhaps North Korea….
….that Kalani or most of the regular commenters or regular K-bloggers elsewhere would never suggest trade between China and South Korea was minimal or small.
So, they would recognize for what it was when someone offered a kneejerk attack dismissing all these people as just the angry expat brigade ignorant of the real South Korea (Asia).
3:36 pm on October 17th, 2008 19
To be fair, no post before #4 had any animosity in it. You came in the topic with a blaise air of confidence and pompousness that really was not needed.
12:41 am on October 18th, 2008 20
Kalani,
Gyopo or no? No. Quite getting caught up in this issue of what my ethnic identity is and just deal with the arguments I'm making. After all, I extend the same courtesy to you. I don't reduce all you arguments down to the chip on you shoulder you developed from being turned down by a working girl in Itaewon.
Second, again, just like USinKorea you cite these individual, ancillary developments as being characteristic of the China-ROK trade relationship. Frankly, it sound like some warmed over version of Ralph Nader of Pat Buchanan. Fact is, everything that you and USinKorea cite about the China-ROK trade relationship can be said about just every other trade relationship China has with countries.
Do you think anti-China sentiment exists on in South Korea. If so, I suggest you come to my hometown of Troy, MI and talk to some GM workers. Think violation of intellectual property rights occurs just between China-ROk. Again, this is a complaint that many other countries beside Korea makes to China.
Fact is, trade between China and South Korea is huge and diverse. And because of this vastness and diversity, anybody who wants to find problems in this relationship will. It's just a matter of probability, repeat it enough times and it'll most likely happen.
Finally, if I'm this gyopo whose out to defend the "purity and pride" of Korea, don't you think that I'd have jumped China for insulting Korean pride through their obstructionist actions.
2:27 am on October 18th, 2008 21
The Calebrisi Shield
From now on, every time I hear some foreigner complain about some trade issue involving the United States, I'm not going to offer a counter opinion and get into a fruitful debate about the issue they bring up. No. I'm going to work valiantly on my effort to shut them up. I'm going to use the Calebrisi Shield:
I'm going to insult them by calling them nothing more than a narrow minded bigot. I'll explain that the US has massive trade with a multitude of nations – so much so – the idiot I'm talking to could not possibly fathom the reality of American trade, so they should shut up. All they are doing is exposing their ignorance when they try to talk about this or that one tiny element of American trade. HA!
4:25 am on October 18th, 2008 22
I didn’t intend to get involved with this Gaetano bickering, but I think I need to make my viewpoint clearer.
“Good lord. Posts like these are typical of the short-sighted schaudenfreud that infects expat commentary on Korea.”
I wasn’t going to say anything, but Gaetano again is here stirring up the pot — and there seems to be something definitely wrong with his outlook.
First, I make the assumption — and I may be wrong — that Gaetano is a gyopo as his outlook on any issue seems to be slanted in that direction. He seems to picture himself as some sort of Don Quixote riding into the midst of the expat territory to defend the purity and honor of the Korean damsel.
I know I can’t compete with him because of his superior intellect and higher education — which he repeatedly has demonstrated by his eloquence and word-smithing. In contrast, he correctly described me — though aimed at US in Korea — as a person with “confused thinking and inability to marshall precise language.” Hell, I certainly can’t figure out how to use “schaudenfreud” in a sentence so I know I’m not in his class. So as to Gaetano, I can’t respond to his followup comments — which undoubtably will follow — as I can’t compete in a language skills debate with an educated troll of his calibre. I won’t.
As to Gaetano’s original comments expats exhibiting a “short-sighted” enjoyment of watching Korea finally getting its come-uppance by China in the protectionist arena, the answer is “yes” — a big resounding “YES”.
Remember that this doesn’t say that I or other American expats dislike Korea or its people. All we’re talking about here is simply a matter dealing with an issue of NATIONAL PRIDE. Our Korean loved ones, families and friends are here. We would not be in Korea if we hated the place — and we would have moved on long ago if we did.
A gyopo’s reaction to this issue, such as Gaetano, reflects HIS national pride towards Korea. I don’t see anything abnormal about this sense of national pride and identity. Unfortunately, some gyopos will never be able to fathom how American expats feel — no matter how long they have lived abroad. They are too self-centered to understand how Americans feel about conditions or issues. They go on to try to attack the American expats for their “wrong” ideas.
Most Koreans cannot understand how frustrating it is for an American expat to have sat passively on the sidelines and watched the protectionist attitudes of the ROK over the years. These expats have watched the ROK play the “developing country” card and “we’re a poor country” routine for years — that is until it started bouncing between G-12 and G-11 status. They have watched the ROK play the “staunch ally for 50 years” to achieve its political goals as it stabbed the US in the back during the Roh Moo-hyun era. The watched the ROK negotiate entry into the WTO with the promise of opening the rice market in ten years — and then renege on their promise and “renegotiate” to extend it another ten years. (Sound like a North Korean negotiation technique? Then you can understand the frustration.)
All the while the Amerian expats, national pride was getting rubbed in the dirt. Unbelievably, the Koreans expected the American expats because of their long residence in Korea to understand and sympathize with the Koreans.
The American expats don’t have a say nor any power to change the reality of the situation. They can only simply watch and fume as the ROK stuffs it to the US from its protectionist cocoon. These expats living in Korea can only sit by and absorb whatever comes their way. And when expats state truthfully that they don’t feel bad at all about Korea’s falling on hard times as business is business, they get attacked as some sort of vermin.
You can bet that most American expats take a lot of pleasure in watching the ROK squirm and writhe in pain in this latest instance. It is a feeling that payback time has arrived. Most AMERICAN expats watched silently as the ROK shafted the US over and over. Just one example was limiting the import of American cars into the ROK by a plethora of dirty tricks (tax on engines size, luxury taxes, special taxes, threats of tax audits for those Koreans who bought the foreign cars, etc.) — while at the same time opening up automotive plants in Georgia and elsewhere in the US to bypass the tariff issue. Hynix plants in Oregon and Remocon plants in California…they moved into the US in force. The ROK opened sweat-shops in Central America and Mexico to assemble Korean-made components and then export the finished products into the US under the NAFTA to bypass the tariffs — and put another one over on the US.
Now with all that said, let me say that I don’t feel one bit ashamed as I watch as China puts in place legislation “to protect China’s own industry and to tame major foreign carmakers doing business in
China.” The Chinese are erecting protectionist barrier laws to prevent a foreign “monopoly and oligopoly”. An oligopoly is a common market form in which a market or industry is dominated by a small number of sellers — but in this case, the Chinese want it to be a small number of CHINESE sellers. Does this sound familiar to the Korean situation?
Now let me say a word about all the happy faces that Gaetano wanted to paint on the ROK-China relationship. The phrase mentioned by Gaetano was “a deep, mutually reciprocal, and institutionalized trade regime.”
The Chinese are copying the Chaebol model for joint-ventures — but are better at stacking the deck. The Chinese hold the controlling interests by law. It is an uncomfortable marriage of convenience. By and large joint ventures in China are a dangerous proposition. A 2005 Washington post article stated, “Local partners simply have too many ways to profit personally without the business making any profit. They can use the joint venture operations to do the low cost work for their wholly owned factories. They sometimes run illegal night shifts that make counterfeit goods that are then sold in direct competition to the joint venture’s wares. They funnel the construction and maintenance biz to their unemployable cousins, then share the spoils privately. When foreign investors can, they pretty much favor wholly owned operations to avoid the minefield of jumping into a mysterious system with a partner whose motivations may be hard to discern.”
It’s truly sad that some Koreans will not admit to the truth even if it is written on their noses. The ROK in its GREED rushed into China to take advantage of the cheap labor because the Koreans wouldn’t do 3D labor — before the days of the wholesale import of foreign labor. The ROK rushed headlong into China in the same way they rushed to Russia where its $3 billion loan turned to default. In China, they initially got snookered as they found out that the cheap labor there were like hakka hill tribesmen — farmers with no idea of technology. Many mid-sized businesses got burned badly and slunk out of China in the middle of the night. Though some Koreans might want to pretend it is a only small group, it was significant enough for the Chinese government to file a complaint with the ROK government about four months ago.
In China, the Koreans are positioning themselves to take part in the burgeoning “middle-class” that has a hunger for consumer goods. The Chinese on the other hand want the technology to be able to foster their own “homegrown” line of products. Design? No problem. Simply ripoff the Korean designs. It has been said the Chinese models are knockoff copies of the joint-venture models — only cheaper. Patent infringement? In China, no problem — what patent?
The Chinese are now using the lessons learned from the Koreans. They want technology transfer — and will do anything to get it. If they can’t get it legally, the Chinese are not above industrial espionage. Ask the USTR about the problem with China — along with the FBI. Former Korean employees of major companies have copied secret processes and plans/trade secrets and planned to sell them to the Chinese. Only a few have been caught. Chinese hackers have broken into major chaebol computer systems. In Korea, it is unknown the extent of the damage of Chinese industrial espionage as only the tip of the iceberg has been revealed so far.
As to the Chinese influence in Korea, Gaetano should talk to the unionists at the Ssyangyong plant in Pyeongtaek, Kyonggi-do. I’d love to be present as the unionists at the Ssyangyong give him a piece of their minds. When China’s SAIC Motor Corp first proposed to buy the controlling interest in the plant from GM Daewoo, the unions opposed it vehemently saying that the Chinese would just rip off the company technology (Mercedez-Benz cooperative technology) and patents and gut the company. The Chinese promised to invest a billion-dollar package in the company. In 2005, SAIC paid about $500 million for a 51.33% stake in the sport utility vehicle-focused carmaker. Well, bullshit floats — the Chinese have NOT invested in the company and have gutted it for its technology. After big talk of entering the US market, Ssangyong closed its main Pyongtaek plant for an extended period in July/August 2008 due to slow vehicle sales at home and abroad. Go talk to the Korean union about the happy Chinese partnerships. Want to talk about trust? In July 2008, they raided the Pyeongtaek plant of Ssangyong under allegations that it had illegally leaked hybrid technologies to SAIC Motor since 2005.
Keep painting happy faces on the ROK-China relationships if you want, but others think not.
3:51 am on October 18th, 2008 23
@Kalani:
Your long response to Calebrisi is on target, save for the irrelevant ethnic reference. Our views are shaped by our identities and experiences, but whether or not one is Korean does not determine the validity of one's views on Korea-related issues. "You must be a gyopo" is no better than "You cannot understand because you are a foreigner."
3:52 am on October 18th, 2008 24
USinKorea,
Rather than call it "The Calebrisi Shield" I'd recommned the "The Calebrisi Long/Short Term Metrics of Trade Relations". Not as punchy, I admit, as your appellation but I still think it more then suffices. It goes something like this:
Trade relations between countries should be measured as to whether a series of individual, short term events constitute a tipping point so as to alter the dynamics of the long term trade relationship.
If you had the intellectual honest-or creativity for that matter-to apply this to the China-South Korea trade relationship you'd find that a lot of your assumptions simply don't pan out.
Furthermore, all this huffing and puffing about how the China-South Korea trade relationship doesn't deserve a "happy face" label becomes more and more silly when you take in to consideration the recent summit meetings between Lee Myung Bak and Hu Jintao.
According to a Xinhua report of Hu's visit to Seoul:
[Hu called for both sides to] "…deepen economic and trade cooperation. Hu urged both sides to complete adjustments to the joint research report on medium- and long-term development planning in economic and trade cooperation, so that it can act as a guide for medium- and long-term economic and trade cooperation. The two countries could strengthen cooperation in such key areas as telecommunications, energy, finance, logistics and environmental protection, President Hu said."
I don't know USinKorea and Kalani, for two countries that are involved in a "hostile" trade relationship, statements like this do seem odd, don't you think?
4:12 am on October 18th, 2008 25
You didn't ask my opinion, but I'm going to give it anyway. I can't believe a commenter with sophisticated language and extensive background knowledge like yourself would lamely toss out a diplomatic public statement from a Chinese leader as apparent counterevidence against claims about trade conflicts.
4:25 am on October 18th, 2008 26
Gaetano,
I apologize for referring to you as a gyopo. Your past words and Korean attitudes sure give one the impression that you are.
As to dealing with the arguments you make as I have said in the past — there is not much substance. I was writing about (1) expat attitudes about the ROK come-uppance with China (and you failed to grasp the idea of frustrated American national pride reflected in this attitude) and (2) ROK-China relationships (as I have observed it develop from the recognition of the PRC to the present). Instead, you rewrite about diversionary topics that are off-shoots and not relevant. You continue to try to make arguments simply for the sake of arguing.
You are very intelligent — but unfortunately, you choose to be nothing more than a troll and I don't want to play. I'm out of here.
5:16 am on October 18th, 2008 27
"I can’t believe a commenter with sophisticated language and extensive background knowledge like yourself would lamely toss out a diplomatic public statement from a Chinese leader as apparent counterevidence against claims about trade conflicts."
I'm sorry, but what the hell is so "lame" about me "tossing out" an announcement by a Chinese leader? Hu's statement, along with statements made by Lee indicate that both countries are committed towards a robust and developed trade relationship. You can cite all the trade incidents' you want. The fact is, when two leaders make publically stated diplomatic committments in regards to their trade relations, it goes to show that there is plenty of room with which to work around and negotiate over arising disputes.
Finally, I find your wholesale dismissal of Hu's statements an indication of certain ideological biases you have about the PRC rather than being a legitimate critique. You seem to be operating under the cynical assumption that nothing is to be believed from the Chinese side.
5:31 am on October 18th, 2008 28
The only commitments that count are the ones signed on paper with clearly stated, enforceable consequences.
To clarify your misreading of my previous comment, leaders of all countries make diplomatic public statements that carry little real weight.
5:44 am on October 18th, 2008 29
"The only commitments that count are the ones signed on paper with clearly stated, enforceable consequences."
No argument there. However, I believe it is incumbent upon you to go back and read the statistics that I provided in my first comment on this thread. The statistics show clearly and unimpeachably that the OVERALL trend of trade relations between China and South Korea is toward that of cooperation. Complement those statistics with Hu and Lee's statements, along with the fact that despite food safety scares and individual disputes that commercial exchanges did not coming to a grinding halt as it has in other cases, then you have a pretty compelling class that the gloom and doom characterizations are overblown.
So yes Sonagi, "leaders of all countries make diplomatic public statements that carry little weight." The long term scenario in regards to China-ROK trade relations, however, seem to indicate that both sides haven't received or don't seriously consider your summation.
5:58 am on October 18th, 2008 30
Much earlier in the thread, USinKorea called you on your strawman argument. I shall reiterate that Korea and China are major trading partners does not disprove the existence of trade friction.
6:26 am on October 18th, 2008 31
I never said that Korea and China's extensive trade relations discount the existence of "trade friction".
I'm simply trying to argue that this obsessive emphasis on "trade friction" distorts the overall general picture.
Think of it this way: In the run up to the Iraq War, DOD saber rattlers pored over reams of intelligence concerning Iraq's WMD program. To be sure, they found instances, hints, and some would say persuasive evidence that Iraq was intent on developing WMD's.
However, all this emphasis on testimony from a defector, the wayward aluminum tube found here, and satellite pictures were all for naught. There was no scary WMD program that was being pursued and the US subsequently got egg all over its face. Simply put, some folks at the DOD got tripped up over details that turned out to be really nothing at all.
I know that both instances are like comparing apples and oranges. Still, I can't help but notice the similarities in the cognitive process.
7:50 am on October 18th, 2008 32
Just ignore him and his holier-than-thou post. He will eventually take his toys and go home.
Rule # 1: Never argue with an idiot, or you will soon lower yourself down to their level.