ISSN : 2233-5609 Publisher: Kim Joon-Han Published by POSCO Research Institute Editing Director: Kim Chang-Do Editor-in-Chief: Yoon So-Jin Printed by Jeong-Moon Printing Co., Ltd. Date of lssue: April 25, 2012 The views expressed here are those of the authors and do not necessarily represent the official views of POSCO Research Institute. Not for sale. Copyright © 2011 POSCO Research Institute All rights reserved. Production in whole or in part without written permission is strictly prohibited. Registration number: 강남바 00092 Registration date: December 16, 2010 How to contact the Quarterly: [email protected] Contents Spring l 2012 l Vol. 06 Column 04 In pursuit of building India-Korea synergy 004 S.R. Tayal A new era of trilateral cooperation among Korea, China, and Japan 008 Shin Bong-kil Two perspectives on the Indian market 012 Kim Joong-keun The Chinese economy in 2012 15 China’s growth engine remains strong in 2012 017 Han Jae-hyun Managing “China’s variables” is key to the Korean economy 025 Shim Sang-hyung India suffering from reckless 33 resource development India, the world’s third largest iron ore exporter, suffering from shortages 035 Imm Jeong-seong Worsening power shortages in India due to coal production disruption 043 Imm Jeong-seong Tenth anniversary of China’s 51 accession to the WTO Chinese companies facing qualitative changes enter foreign markets 053 Furong Jin The changed international trade order over the last decade 061 Ku Ki-bo India in the pursuit of food 67 security India in urgent need of a stable food supply 069 Kim Mi-su India needs a Second Green Revolution 077 Kim Chan-wahn Issue analyses 85 Two years under CEPA, time to speed up the tariff reduction schedule 087 Cho Choong-jae The fall in China’s real estate prices controlled by policies 095 Chung Cheol-ho Tata Group names a young successor: talent trumps family relations 103 Lee Dae-woo China’s dash for space development 109 Lee Joo-ryang Corporations 117 Why does Korea lack prospering Chinese-run companies? 119 Kim Chang-do The global strategies of Ewha Glotech, a Korean textile machinery manufacturer 125 Kim Eung-ki Culture 129 From everyday life to politics, the power of Indian astrology 130 Chung Ho-young The culturology of China’s urban development 135 Jang Soo-hyun In pursuit of building India-Korea synergy COLUMN S. R. Tayal Former Ambassador of India to the Republic of Korea (2008-11) uring my three years’ stay in Korea, the relations between India and Korea have had a quantum jump. A Strategic Partnership between India and Korea was announced during D President Lee Myung-bak’s visit to India in January of 2010. A Comprehensive Economic Partnership Agreement (CEPA) also became operational in the same month. There is a tangible desire among the people, governments, and the corporate leaders of both countries to enhance bilateral trade and exchanges. It is good to note that investments are flowing both ways with the Mahindra Group taking over Ssangyong Motor Company in November of 2010 with an investment of more than USD 400 million. The people of Korea are known for their passion and focused approach to meet their objectives. The work ethic of both Korean executives and workers is praiseworthy. I found the management of Korean companies to be very outcome-oriented. Korean executives have to deliver and meet the targets; otherwise they are shown the door. 004 POSRI Chindia Quarterly�Spring 2012 The South Korean global “The future of India-Korea profile has been growing and its economic relations is bright. All acceptance in the international the bilateral arrangements and community is very high. This is instruments for facilitation of reflected in the unanimous re- trade and investment are in “ place. election of UN Secretary General Ban Ki-moon. The successful hosting of the G-20 summit in November of 2010 added to the stature of Korea as a mature and globally responsible player. Korea and India have a similar world view, and both countries follow a democratic polity with a robust private sector. Commercial relations are also developing well. However, there is a need for better understanding of each other’s culture and psychology. Concrete efforts are being made in this direction. A festival of Korean culture is being held in India and a festival of Indian culture is being held not only in Seoul, but also in other major cities of Korea this year, with numerous cultural performances and programs. India has opened an Indian Cultural Centre in Seoul, and the Government of Korea also plans to open a cultural centre soon in New Delhi. To enhance the understanding of Korean governance and polity amongst India’s decision-makers, we have been encouraging groups of Indian administrators, defense officials, and executives to come on study trips to Korea. Mid-level officers of the premier Indian Administrative Service, officers from the National Defense College, and the trainees of senior executive programs of several Indian Institutes of Management have been coming to Korea for two to three weeks. They have found this exposure very educative. It is time that the Korean side deputes groups of Korean executives and government officials, as well as officers of the armed forces, to visit India for study tours. The experience of India in the growth of 005 Spring 2012�POSRI Chindia Quarterly information technology, higher education, particularly of management and engineering, green revolution, Operation Flood for enhancing milk production, etc., would be very informative to Korean executives and officials. With the rising number of foreigners in Korea’s population, India’s successful experiment in harmonious living in a multi-religious, multi- ethnic, and multi-linguistic society would also be instructive. A recent development is the presence of a small but growing number of Indian students in many of the important public and private universities in Korea. These students are here on scholarships for doctoral or post-doctoral research, and would be an important bridge between the student community and faculty of Korea and India. These students would also be an important resource for both Indian and Korean companies. The success of Korean brands in the Indian market is well-known. Both in the consumer goods industry and in plants and equipment, Korean companies have made huge inroads in the Indian market. Indian companies have a definite competitive advantage in sectors like information technology, pharmaceuticals, and chemicals, and also in some agricultural products. However, the industry associations in Korea are very stern and sometimes make the entry of competitive foreign companies difficult. I am disappointed that India’s world-famous IT companies have also been unable to penetrate the Korean market because of cultural and linguistic barriers. India’s generic drugs manufacturers have also found entry barriers to be high. The way to go forward is to identify areas of convergence and synergy between Korean and Indian businesses. Now that Korean companies are winning numerous engineering and construction contracts in the Middle- East, it is time for them to leverage the capacities of Indian companies, which have long experience in operating in Middle-Eastern countries. There are immense possibilities for harnessing skilled manpower and professionals 006 POSRI Chindia Quarterly�Spring 2012 from India to design as well as execute projects in third countries. As Indian architects and engineers think and work in English, their communication with the end-user is fast and easy. Korean companies need to look at India not only as a market for their goods and services but also as a partner for co-production and as a base for manufacturing. Manufacturing equipment and materials in India to meet the rising demands of the Indian market, as well as for export to South Asia and the Gulf countries, would bring the desired economies of scale. I am happy to see this thinking in large Korean corporations. Doosan Heavy Industries has established a boiler making facility near Chennai. Hyundai Heavy Engineering is working to establish a facility for manufacture of transformers in the State of Gujarat in western India. Our challenge is now to create conditions for the entry of mid-level Korean companies in India that have a turnover of USD 50-100 million. The fast developing Delhi-Mumbai Industrial Corridor offers an opportunity for the creation of a free economic zone (FEZ) tailored to Korean small and medium companies. The DMRC is a new railway corridor, between Delhi and Mumbai, which will have a number of industrial estates along the route. Both the industries and developers of India and Korea need to work together for such an FEZ. The corporate leaders as well as business associations have constant dialogue to explore new opportunities. We, in the government, are ready to encourage and assist this process. 007 Spring 2012�POSRI Chindia Quarterly A new era of trilateral cooperation among Korea, China, and Japan COLUMN Shin Bong-kil Secretary General of the Trilateral Cooperation Secretariat n September 1, 2011, the Trilateral Cooperation Secretariat (TCS) opened its office on the 20th floor of S-Tower at Gwanghwamun, overlooking Deoksu Palace. The TCS is an O international organization with diplomatic privileges and immunities, established upon conclusion of an agreement by the governments of Korea, China, and Japan, and the ratification of the National Assemblies of the three countries. Compared to other international organizations, such as the UN Secretariat, the EU Secretariat, and the ASEAN Secretariat, the TCS is currently a rather small organization, with only three member countries; however, its presence as an international organization is strong, because its member countries are at the center of the world’s attention.