Why China Overtook Korea in Shipbuilding

Korean shipbuilders took up the top 10 spots in the global industry in 2006. Back then, No. 5 STX Shipbuilding sought facility expansion. To emerge as a world class shipyard, it needed more than 3.3 million square meters of land, or far more than the 16,500 square meters the company secured around its shipbuilding site in Jinhae, South Gyeongsang Province, for the past five years. Due to uncooperative landowners and thick layers of regulation, the company instead turned toward Dalian, China, which offered better terms. At the same time, world No. 6 Hanjin Heavy Industries and Construction decided to build a new shipbuilding site at Subic Bay in the Philippines in the same year. As a result, more than 100,000 new jobs were created overseas, including those generated by partners of Korean companies.

Korea has lost its title of world shipbuilding leader for the first time in 10 years to China. China controlled 34.7 percent of world ship orders excluding those delivered from the total number of orders, or one percentage point more than Korea. Furthermore, Chinese shipbuilders won 142 contracts, or more than half of global orders, this year. China’s success is largely thanks to its domination of the lower-end vessel market with its large foreign reserves and orders placed with Beijing’s support. Though Korea is ahead of China in high value-added areas such as LNG ships and offshore plants, there is no room for complacency. At this pace, China could soon overtake Korea in the two areas.

China took over the world No. 1 spot largely thanks to the passion and dedication of its leadership, which never forgot to visit plants of large conglomerates whenever they came to Korea. For example, then Chinese Vice President Hu Jintao in 1998 visited the plants of Samsung Electronics, Hyundai Motors and Hyundai Heavy Industries when visiting Korea. He was followed by Wu Bangguo, chairman of the Standing Committee of China’s National People`s Congress, who visited the Pyeongtaek plant of LG Electronics in Gyeonggi Province, and the Ulsan factory of Hyundai Motors in South Gyeongsang Province in 2003. In 2007, Chinese Premier Wen Jiabao made an unprecedented visit to SK Telecom, leading many experts to speculate that China, dubbed “the world’s factory,” was no longer interested in benchmarking Korea’s manufacturing industry.

While Chinese politicians focused on nurturing their manufacturing sector including electronics, cars and shipbuilding, their Korean counterparts simply indulged in corporate bashing. Regulations forced Korean companies to waste three to five years just to get approval for a plant that took a year to build, but what did Korean politicians do? They strengthened regulations to further stifle corporate activity, such as putting a ceiling on total equity investment and restrictions on investment in the Seoul metropolitan area. These deplorable acts simply reaffirm Korea’s reputation as an impractical country. Unfortunately, this means it could be only a matter of time before China surpasses Korea in cars and electronics, followed by shipbuilding.

Editorial Writer Park Yeong-kyun (parkyk@donga.com)

Korean mafia thriving in RP

By: Renato Gomba Quilicol - Journal Online

THE Philippines has now become a “haven” of the leaders and members of the “Kuan Jupang,” also known as the Korean mafia.

This was revealed by legitimate Korean businessmen in Metro Manila who has become victims to the dreaded group, which seems untouchable to local police authorities.

The victims requested anonymity for fear of reprisal, adding that the number of “Kuan Jupang” members in the Philippines has grown bigger and could have already outnumbered their foreign counterparts, including the triad and bamboo gangs of China and the Yakuza of Japan.

The businessmen talked about their horrifying ordeal from the day they first encountered the members of the group.

They recounted how they were harassed and intimidated by the group, who demanded monthly “protection money” amounting to millions of pesos.

They were also threatened with physical harm or death should they fail to comply with the criminals’ demands.

A Seoul businesswoman admitted giving the syndicate P2 million in exchange for the safety of her family, knowing the fact that the Korean mafia uses local assassins in dealing with those who say “no.”

“That is why many of us were forced to hire local bodyguards because we knew they could kill us anytime they want in case we did not give them money,” another businessman said.

It was learned most members of this Korean crime ring are either undesirable aliens or wanted criminals in their country.

How they were able to enter the country using spurious travel documents remains a big question mark.

“It is interesting to know why these criminals managed to slip into despite being included in the Bureau of Immigration’s blacklist,” the Korean businessmen said.

Apparently the Korean mafia has already established vast connections among key government agencies such as the Department of Justice, the Bureau of Immigration and the Philippine National Police, being unhampered in extortion and money-laundering activities, they claimed.

They also believed the mafia is responsible for kidnappings and murders of Koreans in the Philippines, many of which were not reported to police authorities.

A particular incident took place in Porac, Pampanga, in December last year, where a Korean couple operating a language school was shot dead by masked men in front of their terrified children.

How many Koreans are really here? Almost half a million? BI officials say only 11,889 are documented

Koreans are the top tourist arrivals in the Philippines.

The Department of Tourism’s figures show dramatic rise in Korean visitor arrivals from 489,465 in 2005 to 572,133 in 2006. The surge continues until the first quarter of the year.

From January to March 2007 there were 171,716 Korean tourist arrivals. This means there will at least be 684,000 by year-end. But the DOT—because it is carrying out a campaign to woo more and more Koreans to our shores—feel there will be much more.

The influx to Koreans come to become legal residents has also grown. According to the Korean Chamber of Commerce, from barely 7,000 in 1980, the number grew to 70,000 by 2005. Koreans living in the Philippines today are estimated by Korean sources to be more than 100,000.

Other estimates—including those of the Bureau of Immigration Intelligence Department—give a much higher figure of up to nearly half-a-million. Most of these are of course illegal and undocumented.

The tourists are starkly visible in the country’s major destinations—like Boracay, Davao, Cebu and Bohol.

Makati’s Barangay Poblacion is the most famous “Korean village” in Metro Manila. But there “Korean villages” and strings of Korean stores and restaurants also in Quezon City and even Cainta, Rizal.

Most of the resident-population, whether legal or not, are students—mainly studying to speak and read English.

Korean travel agencies have organized partnerships with Filipinos or fellow Koreans with legal residence in the Philippines to open English-language schools. Koreans of all ages then come to the Philippines as tourists with one-month visas or longer. During their stay, they do almost nothing else but attend English classes. Their teachers are Filipinos.

A similar course in Korea would cost them 20 times more than their expense for their tuition and plane tickets and lodging in the Philippines.

Then there are Korean students with proper visas to earn bachelor’s, master’s and doctoral degrees in Philippine colleges and universities. Many of them are enrolled in the provincial universities—like the ones in Bulacan, Bataan and Pam-panga here in Luzon.

The Philippines has also become a favorite destination for Korean retirees.

Korean retirees—just like their still business-active compatriots living and working here—are in almost all of the Philippines major urban areas. They are in Baguio, Subic, Angeles, Cebu, Iloilo and Bacolod, Davao and Cagayan de Oro.

Korean restaurants and grocery stores cater to them. Signs in Korean Hanggul script advertise their Korean names. There are Korean Protestant churches, hotels and bars.

They have for Koreans-only restaurants and subdivisions.

Most Filipinos welcome them. Some, who write to the newspapers, call up radio talk shows, damn them for being loud and noisy, rude and stingy.

Some Koreans came years ago as children and grew up here. They speak Tagalog and the regional languages. Besides English, they are particularly well versed in Ilokano, Ilongo, Capampangan and Cebuano.

Attractions such as cheaper English education, resorts and golf courses and wider business opportunities for those with some capital (much more than local small and medium size enterprises have) as well as Korea’s relative geographic proximity to the Philippines are the prime reasons behind the phenomenal rise of the Korean population here.

The hospitality for which the Filipinos are famous also drew them in.

Some records from the Bureau of Immigration indicate that Koreans come back after their first visit. Numbers of them return many times over and over again. They find and grab business opportunities. Koreans here are in tourism-related investments such as travel agencies, resorts, hotels, restaurants and spas that continue to sprout and grow in the major cities here.

Marketing initiatives, relaxed entry formalities and budget airlines as well as flight frequencies have also facilitated the Korean invasion.

The government is looking forward to reaching as high as 800,000 Koreans by the year 2010.

Meanwhile, as far as the BI data is concerned there are now 240,000 Koreans living in the country but only 11,889 of them are properly documented.
By Julia M. Fabon --With William Depasupil - Manila Times