May 22, 2009 11:22
President Lee Myung-bak held his weekly emergency economic meeting Thursday, and the topic this time was China. The meeting focused on improving trade, looking at ways to benefit from the rapid growth in Chinese domestic demand spurred by Beijing's 4 trillion yuan or US$586 billion stimulus measures.
Currently 93 percent of Korea's total shipments to China are industrial parts and equipment for manufacturers that operate factories there. About 25 percent of the goods coming out of Korean factories there then heads directly to Chinese markets and consumers, with the rest shipped off to other countries. So in total, Korea's direct sales to the rising Chinese consumer market only come to about 30 percent of total shipments to China.
Seeing potential in those numbers, the government decided to increase sales of high-end goods to the Chinese upper middle class, with the economy ministry predicting that by 2013 there will be over 150 million consumers in China earning more than $20,000 in annual income.
To meet the goal, the government will build marketing and logistics networks in China including 20 additional Korea Business Centers by 2020 that will support investors and exporters. It will also become easier for small and medium-sized exporters to China to join a state-run export insurance program to reduce risk.
The meeting also decided to support Korean corporations looking to take part in Chinese construction projects by easing licensing regulations for overseas construction businesses.
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