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Finding market opportunities in SOUTH KOREA Foreword Korea and Norway enjoy close bilateral economic and trade relations. Korea is at present Norway's second largest trading partner in Asia. Trade with Korea has increased considerably over the last few years, and the importance of our co-operation continues to grow. Until recently contacts were mainly linked to shipping and the Nobel Peace Prize last year in recognition of his work shipbuilding. These sectors are still the most important, in these fields and for his efforts to promote peaceful but we are now entering into a new phase in our coope- reconciliation with North Korea. ration. Norwegian companies have invested or are consi- dering possible investment in Korea. We also witness Norway participated in the Korean War with a field hospi- enhanced cooperation in technological fields, fisheries tal. Our friendship dates back to that time and to our and seafood. medical cooperation after the war. Norway has resumed her membership in the United Nations Command. Last year, Norway and Korea established a bilateral eco- nomic consultation committee. The first meeting of the I rest confident that our traditional cooperation will be committee took place in Oslo in June 2000. At the same further strengthened and expanded as we move forward time the Federation of Korean Industries and the in The New Millennium. Confederation of Norwegian Business and Industry reinvigorated their cooperation through the Korean- Norwegian Economic Cooperation Committee (KNECC). International Business has selected an interesting and In March 2001 Norway and Korea intend to sign an most promising country for their study in 2001. agreement on cooperation in fisheries a most promising sector for mutually beneficial cooperation. The Norwegian Govcrnment has actively supported eco- nomic and cultural cooperation between our two coun- tries and we are looking forward to further strengthening our economic, trade and cultural cooperation. Cultural cooperation is important for promoting understanding and cooperation between countries. Oslo University has started courses in the Korean language and Hankuk University of Foreign Studies, Seoul, teaches Norwegian. Korea and Norway are both committed to democracy, human rights and the market economy. We have much in common, especially in the economic field. We both see our future based on a knowledge-driven economy and international trade liberalisation. We share interest in international peace and security in North-east Asia and Thorolf Raa the world. All Norwegians admire President Kim Dae- Norwegian Ambassador to Korea jung's active commitment to democracy and human rights and they were very pleased that he was awarded 1 International Business Contents Business Culture Labour Relations Meeting and Greeting The Labour Standards Act Part 1 Names and Titles Employment GENERAL BACKGROUND Body Language Employment of Foreign Workers Eating and Drinking Manners in South Korea THE KOREAN SUNSHINE POLICY 8 Tipping Wages and Salaries POLITICS 10 Gifts Unions Political System Hints on Behaviour Retirement Insurance Constitution TECHNOLOGY 28 Work and Residence Permits National Assembly Import & Export The President and The Cabinet Communication SUPPORT FACILITIES 44 The Prime Minister Broadcasting The Embassy and Consulate Local Government Telecommunication The Royal Norwegian Embassy, Foreign Policy Internet Korea Political Figures Energy Situation Royal Norwegian Consulate, Korea Historic Perspective Oil The Embassy of the Republic of Main Political Figures LNG Korea, Norway. Political Forces Coal National Resource Centres Political Parties Electricity Norwegian Trade Council Political Issues Environmental Issues International Trade Fairs Political Landscape Korea Trade-Investment ECONOMY 14 Promotion Agency The East Asia Miracle The Korea Investment Service Centre (KISC) Miraculous Growth? Export Financing and Insurance Growth in South Korea The Norwegian Guarantee Institute Favourable Initial Conditions and Part 2 for Export Credits (GIEK) Domestic Capital Accumulation FRAMEWORK FOR DOING Eksportfinans ASA Government Interventions and BUSINESS Economic Support Export-Lead Growth Through Funds Liberalisation and Indirect Guidance SETTING UP BUSINESS IN KOREA 34 What Made Korea Vulnerable to Statens Nærings- og Foreign Direct Investments Distriktsutviklings Fond (SND) the Financial Crisis in 1997? Exchange Controls The Research Council of Norway Korea’s Structural Weaknesses Prior Permission (Forskningsrådet) to the Crisis Business Formation Nordic Project Fund (Nopef) The Financial Crisis Representative or Liaison Office The Nordic Industrial Fund The Policy Response to the Crisis Branch (Nordisk industrifond) Enhancing Transparency Joint Venture Korean - Norwegian Forums Improving the Capital Structure Subsidiary Company The Korean - Norwegian Economic of Firms Registration Process Cooperation Committee Increasing Labour Market Flexibility Licenses The Joint Economic Committee Review of Government Regulation Cultural Differences Related to Maritime Forums The Economic Recovery in 1999 the Business Formation Norwegian Maritime Exporters Sustaining the Recovery (NME) Equity Share and Enhancing Korea’s Long-term INTSOK Management Control Growth Potential Motivating Devices For More Information Principles to Guide Reform Keys to Success BANKING AND FINANCE 50 SOCIETY AND CULTURE 22 Most Difficult Markets in Asia Financial Watchdogs Analysis of Barriers in Asian Markets History Financial Criminality for European Companies People The Banking Sector Population THE LEGAL FRAMEWORK 40 History Family Relationships Taxation The Current Situation and Future Language Corporate Taxation Prospects Religion Taxable Entities The Financial Sector Arts and Music Foreign Investment Promotion The Bond Market Food Act (FIPA) The Securities Market Education Tax Incentives The Korean Stock Exchange Value Added Tax (VAT) Taxations of Individuals LOGISTICS & SHIPPING 74 IT & TELECOMMUNICATION 94 Part 3 Domestic Transportation Background INTERESTING SECTORS Introduction Telecommunication Infrastructure Road Network and Usage ENERGY & ENVIRONMENT 58 Future Road Network Strategies The Korean IT Industry Energy Airports Informatization and Airlines Government Support Oil Passenger and IT Labour Market Liquefied Natural Gas (LNG) Freight Transportation Coal The Wireless Market Electric Power Shipping The CDMA Technology New and Renewable Energy (NRE) Web Based Logistics Systems South Korea and the Third Privatisation of the Shipping Trends in Northeast Asia Generation Technology, 3G Trans-Shipments Electricity Sector The Future for 3G in South Korea Ports in South Korea 3G Licence Auction The Traditional Structure of the The Port of Pusan The IMT-2000 Project Korean Electricity Sector The Port of Inchon Restructuring Plans E-commerce The Port of Mokpo Broadband and ADSL The Environment – Problems Investing in Korean Ports Policies and Organisations Electronics and the Information Government Institutions FISHERIES & AQUACULTURE 84 Technology Government Policies Fishing Microelectronics Seafood Non Governmental Organisations Infrastructure Beauty and Health Satellite Technology Environmental Technology Korean Fishing Industry: An Increasing Demand NORSK HYDRO, Waste Management and Recycling An Overview Fleet Structure A NORWEGIAN GIANT 102 SHIPBUILDING & OFFSHORE 66 Manpower The Asian Market Shipyards Annual Coastal Catch Statistics China The Development of a Successful Fisheries Policy Shipbuilding Industry Future Prospects NORSKE SKOG 104 Core Activities Shipbuilding in Korea – The Facts Technology The Korean Market Norwegian Ships Gear Production How to Enter the Korean Ships Doing Business STAR ALLIANCE 106 Gear Market Making Contacts PROJECT MEMBERS 108 Step 1: Agent Storage Facilities Step 2: Distribution Step 3: Joint Venture (JV) Fish Markets and Auctions How to Operate in the Korean Import and Export Ships Gear Market "Sea-meat" Service Mackerel Networking Herring Margins Salmon How to Make the Maker's List Cod The Negotiation Process Formalities Technical Meetings Future Prospects Pirate Parts Aquaculture Status and Future Prospects What is Korean Aquaculture? Government Policy of the Northeast Asian Wider Initiatives Shipbuilding Industry Challenges Japan Fish-Health Korea Market Opportunities China Marine Ranching Market Opportunities Acknowledgements I am delighted that the renowned Asia. Shipping related activities have been the foundation student project led by International of the business relationship between South Korea and Business have made the appropriate Norway. However, we are now beginning to see that and timely decision to focus on Korea Norwegian companies are looking to Korea for oppor- this year. tunities also in other sectors. A forum for economic consultations at government level, referred to as the Joint We recently celebrated our 41st anni- Economic Committee, was established last year. versary of establishing official diplomatic The choice of South Korea as the theme for this year’s relations between Norway and Korea International Business project reflects the growing and after four decades of friendship, a economic relations between Norway and South Korea. Park Kyung-tai new chapter is opening in the Norway- Ambassador of The Republic of Korea in Korea cooperation. The first Joint Norway Economic Committee Meeting, headed by the Norwegian Minister of Trade Grete Knudsen and The Norwegian Trade Council opened the Korean Minister of Trade Han Duck-soo respectively,
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