Reports from SERI Quarterly, SERI's in-depth quarterly journal on the Korean and Northeast Asian economies
- October 2013 The Abe Administration’s Domestic Strategy and Northeast Asia
Shinzo Abe has made a surprise return to power as Prime Minister of Japan, and like before, is pursuing his dream of revising Japan’s peace constitution and restoring Japan as a military power. “Abenomics,” his plan to fight deflation, is a preliminary stage to getting enough support to change the foundations of Japanese society.
October 2013 Korea’s Petrochemical Industry Reaches a Critical Juncture
Korea’s petrochemical industry is heavily dependent on exports, but increased self sufficiency in China, and competition from the Middle East are now threatening its hard won gains. The future of Korea’s petrochemical industry will depend on developing better technology that allows it to compete more effectively with rivals.
The 1990s saw a wave of mergers and acquisitions in the world’s auto industry that resulted in huge firms whose operations spanned the globe. In only a few years, however, most of these mergers failed, and the tide reversed into a wave of divestments and spinoffs. Today, the auto industry, and particularly Japan’s auto industry, is seeing its future in emerging markets and new environmental technologies.
The past few years have seen the semiconductor industry make a vast migration from PCs to mobile devices. Korea’s semiconductor manufacturers have managed to both survive and thrive during the transition, but increasing competition and industry consolidation are presenting challenges to Korea’s leadership.
China’s smartphone makers are not yet global household names, but they have nonetheless seized more than 50 percent of their home market, the world’s largest. China’s smartphone makers have leveraged low costs, a local supply chain, and the free Android operating system to seize advantages at home while presenting formidable challenges abroad.
Shifts to mobile computing, a rise in emerging market companies, increased environmental awareness and the arrival of new sources of energy are putting heavy pressure on manufacturers in East Asia to embrace change. East Asian firms are now compelled to increase cooperation within the region, guard against protectionism, and bolster locally developed innovation.
China’s top leadership has entered its fifth generation since 1949, and significant changes are set to ensue. China’s rushed development under previous generations has resulted in significant imbalances in the economy, including income and regional inequality. The new leadership hopes to change this by shifting growth to domestic consumption and urbanizing its population.
Shinzo Abe’s new economic policy, dubbed “Abenomics,” consists of three arrows, monetary expansion, government spending, and structural reforms aimed at reviving Japan’s economy. While monetary expansion has resulted in an immediate boost to stock prices, many of the goals of Abenomics will be challenging to attain.
The Park Geun-Hye administration has just marked its first 100 days, during which the new President’s economic plans have evolved from campaign promises to concrete policy. What has emerged is a new focus on a creative economy, job creation, revival of the real estate market, and alleviation of Korea’s high household debt.
Asia’s new leadership has brought with it new ways of thinking about the economy, including “Abenomics,” a “creative economy,” and “common prosperity.” This will induce a number of changes, including the transformation of China from the “world’s factory” to the “world’s market,” as well as intensifying competition for Korea
US policy in Northeast Asia during the second Obama administration will be characterized by rebalancing and a “pivot to Asia.” Rather than an attempt to “contain” China’s influence, the US and its partners are seeking to ensure that relations remain constructive and mutually beneficial, particularly in respect of the quandary faced by all powers on the Korean peninsula.