20 years have passed after the collapse of the former Soviet Union. For the last 20 years, former Soviet countries were subject to turbulent rearrangement of international order. In particular, geopolitical changes in the Central Asia region emerged as the one of the most important issues facing the global community. In the twenty-first century, the strategic value of Central Asia is increasing and this region has invited the competition among the world powers: US, Russia, and China. Therefore, in the future, Central Asia is very likely be a key variable in the shifting geopolitical hegemony in the former Soviet bloc and the Eurasian continent.
This offers us a perspective for assessing not only nation-building strategies, including transition to market economies and but also synthesizing external factors that impacted this process that has lasted 20th years following the Soviet collapse. This is an essential prerequisite for the Korean government in cooperating with governments of Central Asia, for private Korean companies in managing investment risks, and also very important for establishing Korea’s entry strategy for the region.
Therefore, the main purpose of this research is to analyze factors for integration and faultlines in Central Asia that can spur change in the region or country. This research is especially important for understanding the changing international trends in Eurasia by taking into account geopolitical change and regional cooperation in Central Asia during the post-Soviet era from an academic perspective. Also, it can provide a major impetus for the Korean government in promoting its “New Asia” diplomatic policy.
This study comprises of 7 sections. After the introduction, second and third sections identify whether nation building efforts by each state is actually self-strengthening or genuine movements toward regional integration. We closely examine two factors - the causes behind of unsettled border issues and Islam, which can intensify instability among countries in Central Asia. And then, we consider how these factors can impact integration or disintegration in Central Asia. This helps understand a number of political fissures visible in Central Asia related to social change.
In fourth and fifth sections, we study the geopolitical change and characteristics of international relations in the region. Penetration of the US, efforts of Russia to regain its influence, and Centripetal force of China in Central Asia with respect to establishment of regional security of Central Asia are included. The characteristics, role, and interests and position of member countries of the Organization of Multilateral security and cooperation in Central Asia, a lead taken in CSTO by Russia and China’s lead in the SCO, are analyzed. By comprehensive understanding of the security environment and shifts in international relations in Central Asia, we can grasp the key geopolitical characteristics and foreign strategy of the relevant countries. 
In the sixth section, we attempt a detailed study on certain standout cases to assess the situation of economic cooperation in Central Asia. Especially, we outline the situation of railway infrastructure in Central Asia, and consider the strategic value and geo-economic implication of those railways, and development potential connected to regional economic cooperation. This will help us predict the economic situation of Central Asia in the future.
In the seventh section, we conclude by delineating possibilities for regional integration or cracks in Central Asia. Then, we provide implications for policies regarding strategies for into Central Asia.
This study analyzes methodically all regional conditions in Central Asia, and provides an outlook for the future of Central Asia. Therefore, this research can help readers understand the geopolitical value of Central Asia within the context of the Eurasian Continent and in connection with strategic maneuvers among the former Soviet countries. Secondly, this study can help the Korea government formulate foreign policy and establish a more encompassing Central Asia policy by understanding in depth both side of the issues related to forces of integration and disintegration of Central Asia. Finally, it provides a picture of outcomes of the transition and the process of regional change in Central Asia after the Soviet collapse, and will contribute to the formulation of entry/investment strategies for the Korean government and Korean enterprises concerning Central Asia.     

Development in diverse areas including agriculture, environment, infrastructure, logistics/transportation, and tourism has been a continuous and consistent feature along the regions surrounding the Mekong River. In case of the Greater Mekong Subregion project undertaken by the Asian Development Bank(ADB), the initial concentration of investment in infrastructure is being superseded by increasing focus on the ‘software’ aspect of development, namely efforts at facilitating trade and investment. The projects supervised by the Mekong River Commission focuses on agriculture, management of water resources, and flood control, while also looking into different aspects related to construction of dams for hydropower and its significance for agriculture and the environment.
The Mekong Institute is also an important player in the region’s development, as it oversees projects in human development, and extending the work in this area into various consulting projects. The efforts by the ASEAN-Mekong Basin Development Cooperation(AMBDC) places greater focus on such areas as infrastructure, and logistics/transportation. However, progress has been slower than ADB projects given the comparative lack of funds available to the AMBDC compared to the ADB.
The focus of the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy(ACMECS), headed by Thailand, is on agriculture, infrastructure, and tourism; based on sector cooperation between countries in the region and sustainable development. The level of cooperation in the region is expected to increase with the election of Yinglak Shinawatra as prime minister of Thailand. Also, the ASEAN economic community, which will be implemented by 2015, is expected to offer continued support for the region’s underdeveloped countries (CLMV) in various areas.
The strategies for each country as revealed in the research can be outlined as follows.
Thailand, under the leadership of its PM Thaksin, has sought to secure regional leadership while pursuing its economic and security interests through the ACMECS. It has become the unquestioned locus of development in the Mekong region in terms of its historical relations with its neighbors, geographical location, trade, investment, and economic cooperation.
Cambodia has given priority to growth, employment, equality, and efficiency through its ‘Rectangular Strategy’; with particular focus on management of water resources and irrigation, with emphasis on growth and efficiency.
Laos is engaged in project in development in water resources with aims of extricating itself from its status as a least-developed country by 2020. Its approach to the Mekong region development is strategic, as it seeks to maintain sovereignty and autonomy in the region against obvious geopolitical disadvantages as a weak power. It has maintained a strategy based on multilateralism and  regional balance in the development of hydropower, and made some notable accomplishments such as bringing the MRC headquarters to Laos.
Korea has hosted the 1st Korea-Mekong Foreign Ministers meeting in October 2011, and concluded it with the「Han-River Declaration」of Establishing the Mekong-ROK Comprehensive Partnership for Mutual Prosperity, indicating that Korea would take active part in the development of the Mekong region in the future. Given strategies employed by Thailand, Cambodia, and Laos; Korea will do better to employ the Triangular Cooperation formula, utilizing Thailand when engaging in development cooperation projects involving Laos or Myanmar. In addition, highlighting the role of Tonle Sap River in Cambodia and research for possible advantages it can offer for development cooperation in the Mekong Region will be important. It is also necessary to examine projects that Korean companies can actually undertake through detailed and accurate analysis of water resource/hydropower development in the Mekong. Last but not least, it might be necessary to make the Asia-Europe Meeting (ASEM) scheduled to be held in Vientiane, Laos a forum where measures for active participation in water resources/hydropower could be devised.

<Southeast Asia>
One of the most important characteristics of Southeast Asia seems to be diversity, which has been formed, above all, through its geographical environments and historical and cultural experiences with various countries abroad and among themselves. In spite of the diversity, there have been constant attempts to build a Southeast Asian regionalism through binding together Southeast Asian countries into a community. For example, the ASEAN leaders in 2003 agreed to establish the ASEAN community until 2020 and even signed the ASEAN Charter in late 2007, whose purpose is to build a regional identity and a regional integration.
However, there are many obstacles to the realization of the ASEAN community. For example, the big gap in the level of the economic development among the member states of the ASEAN and the lack of the will to integrate Southeast Asian markets on the part of the member states’ governments and businessmen in the region. Another problem is conflicts among the member states such as those concerning the construction of dams and the illegal immigrants and, more recently, the territorial quarrel on the Hindu temple Preah Vihear between Thailand and Cambodia.
The most important recent aspect of the external relation of Southeast Asia seems to be that with China. Southeast Asian relation with China has not only a cooperative aspect, which can be seen in the establishment of the bilateral strategic partnership between the two sides and the signing of the ASEAN-China FTA in 2002. There is but a possibility of Chinese threat to Southeast Asia too, which can be, above all, seen in the Chinese economic expansion to various Mainland Southeast Asian countries and maritime disputes over some islands in the South China Sea between some Southeast Asian countries and China.

<Thailand>
The aspects of Buddhism and the King are emphasized to show the historical continuity to influence the contemporary Thailand. For Thai political structure, the parliamentary system since the constitutional monarchy in 1932 is investigated. For the recent political change of Thailand, the 1997 Constitution and the 2007 Constitution are compared. The King Bhumibol’s traditional leadership is contrasted with the former prime minister Thaksin’s entrepreneur style leadership to look into the current Thai politics. After the description of many political changes since the 2006 coup, Thai politics is evaluated to experience an inevitable process resulted from the disharmony between the institution and the leadership. Then the problems facing Thai democracy are analyzed with some future prospect.
For the state goal and policy of Thailand, the policy statement to the National Assembly delivered by the prime minister Yingluck Shinawatra is analyzed and various policy fields are classified in detail. The foreign relations of Thailand are described with emphasis on ASEAN, the USA, and China. The diplomatic relations with Korea are studied in the context of historical development and sectoral situation along with the Thai perspective of Korea.
<Vietnam>
Vietnam has grown so fast, marking nearly 10% of annual GDP growth since early 1990s, after launching the reform policy at the second half of the 1980s. However the political reform in Vietnam has still not proceeded well, continuing the one party rule.
In order to accomplish the economic development Vietnam has focused on the integration to the international community and establishing the stable and peaceful international environment. Meanwhile conservative voices to defend the socialist regime also exist.
This trend of national policy was endorsed again at the 11th Congress of the Vietnamese Communist Party as well as the 13th National Assembly and the Government in 2011. It is suggested for the future Korean foreign policy to share the experiences and to find the ways of the sustainable development and harmonized society with Vietnam, deepening the economic and socio-cultural relationship.

<Indonesia>
The purpose of this chapter is to analyze the change and characteristic of the political and diplomatic area in the recent Yudhoyono’s government in Indonesia. The analysis level of this article is that first, the factor of historical- structural power which Indonesia’s society have been lead; second, focusing on the distinctiveness of the political power structure, political party system, political elites of Yudhoyono’s government; third, explaining the national goal and policy of the current government and measuring the empowerment of Indonesia governance; fourth, after democratization in Indonesia, analyzing the Indonesia foreign policy’ change, vision, conflict issues and meaning.
Absolutely the change of the contents and direction of the recent  Indonesia’s political and foreign area is very positive and future- oriented. The political results of Indonesia’s democratization has been influenced on the Indonesia’s foreign power and position in regional and international level. Yudhoyono’s government vision is to develop democracy, muslim and modernization with harmony. However, Money politics in Indonesia, namely the politics of corruption cartel, have been made a problem openly since after the fall of the Soeharto’s regime. Anti-corruption reform in Indonesia is very important to enhance not only administrative’s governance empowerment but also the public function of political party, parliament and the judical system. Indeed, Renovation of public organization and governance in Indonesia have been influenced on democracy and prosperity of Indonesia reciprocally.  

<Philippines>
The Philippine politics is continuously influenced by the traditional family-oriented social value system and the unequal socioeconomic class structure that formulated during the colonial period. They provide the backgrounds for the traditional ruling elite group to maintain and inherit their political privilege generation to generation. The Philippine politics has been operated under a democratic institution for a long time even it is subjected to criticism for its lack of substances. In theory, Filipinos express their political will during the periodical election, and they fulfill their self-governance through the local government system. However, in practice, such democratic institutions are easily abused by the lack of socioeconomic fundamentals for flowering the democratic values. Furthermore, the Philippine political leaders did not show their strong will to change such fundamentals. Recently, some changes could be sensed in the Philippine politics. It is followed by the generational shift within the ruling elite group. It could be seen as a simple change of the same kind with the political family from father to his son or daughter, but the behavior of the young political figures seem to be different from the older generation. They tend to abstain themselves from power abuses and to mind their political accountability.     
Even though the Philippine democratic system could not avoid the criticism for its lack of substances, the Philippine political elites gradually listen to the people’s voice to fill in the lack. Considering these tendency, Korean government need to give more efforts to earn the Filipino mind through informal diplomatic activities. Filipinos has the political culture of ‘utang na loop(debt within the heart)’, which implies the Filipino tendency to repay as much as they received. Korean government needs to concern about the poor living condition of the Filipino underclass who constitutes about 90% of the total population, and provide necessary assistance for improving the situation. Such efforts will help to grow among the Filipinos the mind of gratitude toward Korea. The Filipino public opinion will be delivered to the ruling elites and reflected to the Philippine diplomatic policy. Recently the perception rate of Korea in the Philippines is increasing rapidly thanks to the Korean popular culture. If Korean government officially engaged in the Korean Wave too much, Filipinos would misunderstand the Korean Wave as a cultural imperialism driven by Korean government. Therefore, it would be desirable for Korean government to exert more efforts to plant the mindful and helpful national image of Korea to Filipino masses by engaging in social developmental activities rather than popular cultural activities.

In 2011, it is expected that a profit of 30 trillion won would be realized in the financial sector in Korea. However, as far as profitability such as return on assets or return on equity is concerned, it is not as high as that of other major countries, and further volatility of the profitability is the highest among the major countries. Moreover, it is often said that the financial market in Korea is almost saturated. In this situation, businesses in the financial sector are required to differentiate and diversify their services to improve their profitability, and one of the ways is to expand into emerging economies, like India, that are growing fast at the aggregate level but are getting left behind in the financial sector.
This report examines the Indian financial sector, evaluates its system, and tries to suggest how Korean financial companies make inroad the Indian financial market or expand their businesses there. In addition, along with the Korea-India CEPA(Comprehensive Economic Partnership Agreement), this report studies ways to vitalize Korea-India financial industry cooperation. In particular, this paper provides the information on Indian financial industry and suggests strategies to enter the financial market and expand services in India and expand businesses in India in order to support Korean financial companies.
This paper consists of 5 chapters. Chapter 1 is the introduction, chapters 2 to 4 are the main contents, and chapter 5 concludes the paper. First, chapter 2 overviews the Indian banking industry, examines banking systems and investment conditions, and seeks ways to cooperate between Korea and India in the banking industry. Chapter 3 describes development, current conditions, and the state of competition in the Indian stock market. Chapter 3 also analyzes securities companies in India through case studies, which provides Korean securities companies with references for the penetration and expansion in India. The materials and information in this report are also valuable for the Korean government to support and back up Korean stock companies that are planning to penetrate the Indian stock market. Chapter 4 outlines the insurance industry in India and inspects related investment conditions. This chapter also provides examples in which advanced countries inroad into the Indian insurance market. Next, chapter 4 tries to recommend how Korean insurance companies enter the Indian insurance market and expand their businesses in India. Lastly chapter 5 summarizes the previous chapters and makes several alternatives to strengthen the relationship between Korean and Indian financial sectors.

The central China adjacent to the coastal region of China present significant differences with the coastal region in various manufacturing environments, such as wage level, stable labor supply, and land price. When the coastal region was suffering from the global financial crisis, the rapid development of the inland region helped the Chinese economy to display its undiminished strength. In particular, as an area of high population density, the central region serves as a large market composed of 360 million people, possessing an industrial infra of considerable standards as well as an abundant low-income labor force. It is located in the center of major Chinese cities and is also close to the coastal region. In this aspect, the central region is being emphasized as the area for labor-intensive industries and export processing industries in China to move into, the proposition being supported by the presentation of various related policies. On the other hand, the coastal region, an area where many Korean companies have expanded to, presents worsened business environment in relation to lack of manpower, increased rent, strengthened environmental regulations, and industrial advancement, thus leaving green field-type investment companies with no other choice but to move their production base.   
Hereupon, this study analyzes the application possibility of the production base of the central region in China by examining whether the production factories of Korean SMEs that have expanded to the coastal region to achieve cost reduction and export processing can be moved to the central inland region and by observing which regions these factories can be moved to and which businesses present good prospects.
In this regard, this study selected 5 central cities (Zhengzhou, Xuchang, Hefei, Wuhu, Taiyuan) with favorable export environment that are located at a relatively close distance from the 3 coastal cities (Qingdao, Tianjin, Suzhou) that have the largest number of Korean manufacturing SMEs. And this study analyzed the cost reduction effect according to company transfer as well as the industrial network environment of central cities. The cost reduction effect was estimated in consideration of the reduction of labor cost, the greatest strength generated during company transfer, as well as the increase in transport cost, the greatest weakness. The industrial network environment was analyzed through the main industrial complexes in the relevant region.
According to this study, the cities with the largest cost reduction effect were presented as Tianjin of the coastal region and Xuchanag of the central region. As for Qingdao, cost was increased through moving to the remaining 3 cities in the central region excluding Zhengzhou and Xuchang. And the creation of industrial cluster was different according to city in the central region. Hereupon, companies that are considering to move their production base to the central China must analyze both cost reduction effect and industrial network environment. Furthermore, it is important to find a method by which SMEs can transfer in cooperation with the production chain of related businesses. Also, re-investment must be made to maintain the amount of cost reduction gained through moving to inland transfer at a “narrow superiority” in the aspects of technology and quality. In addition, to support companies that wish to transfer to the inland region or are currently examining the possibility of the transfer, the Korean government must construct matching platforms between coastal SMEs and central inland cities, monitor related information, such as the industrial development plan of main central cities, and strengthen technical cooperation with relevant local authorities in China.

The global financial crisis started in 2008 has changed the world economic order or environments in multiple aspects. The goal of this study is to make an overall assessment of the changes in each aspect after the crisis, to forecast the direction of the further change, and to draw implications for Korea’s international economic policy. This study deals with the topic in four categories: overview of the crisis, changes in global governance, changes in advanced economies, and changes in emerging economies.
In Part I which overviews the crisis, we contrast the recent crisis with the Great Depression of the 1930s from the perspective of comparative history and examine fundamental causes of global imbalances which were an important background of the crisis. Part II discusses the changes in international economic order or global governance created by impacts of the crisis. The changes include the emergence of the G20 as a new international forum, the tendency of financial re-regulation, and the stalemate in international climate change negotiation. This part deals with also the rise of the G2 system as a global political order which was caused by the great resilience of the Chinese economy after the crisis. Part III covers the changes which happened in advanced economies in the post-crisis era. The notable changes are the crisis of the Euro system, widespread fiscal consolidations, and deterioration of economic inequality. Part IV examines the changes in emerging economies. Rapid recovery from the crisis in these economies is contrasted with stagnation in advanced countries. This two-speed recovery from the crisis enhanced the status and proportion of emerging economies. Internally, however, cracks in political order were often incurred as in the Middle East. In East Asia the greater Chinese economy created a substantial change in the regional economic integration framework. In conclusion the prospect of further changes in the world economy and their implications for Korean economy are provided.
The global financial crisis has worked as a momentum to accelerate structural changes which were already under way in the world economy. One of the most significant changes is the shift in the economic gravity from advanced economies to emerging ones. The other is rethinking of economic liberalization or deregulation movements which continued after the 1980s. These changes imply that capitalism requires its reformulation on the basis of new economic and social norms. However, it is highly susceptible whether such reformulations are actually in progress now.
It is also obscure whether a new global economic order is being re-established after the crisis. Although the shift in global economic power toward emerging economies brought about the creation of the G20, the governance seems too fragile and fluid to replace the old global order. Rather, the decline in the US hegemony and heightened tensions between the US and China appear to make global governance more unstable. In addition, regional integrations which were developing encountered a critical moment as shown in Europe and East Asia. Consequently, cooperative global governance seems most unlikely to be built up, reflecting the emerging multi-polar world economic system. The unlikeliness is attributed to the internal weaknesses of emerging economies, particularly China, which should work as a setter of new rules. The weaknesses include income inequality, political risk, lingering inflation, fragile financial system, and so forth. These factors are constraining the capacity or willingness for China to participate in making new global rules. In foreseeable future the world economy will spend time and efforts in managing the problems caused by the crisis with existing global orders dismantled but new norms unset.
Under these prospects for the world economic circumstances, Korea’s economic policy should be aimed at keeping the economic stability against possible external shocks. Particularly it needs to be prepared to absorb the volatile international financial markets and capital flows. As well it has to induce international cooperation in order to resist protectionist trade policies. Korea needs to intensify economic linkages with emerging economies, but also has to be cautious of their political risks. As for the East Asian economic integration, it needs to steadily engage Japan in the integration process and to circumscribe the leverage of China together with Japan.

The global financial crisis started in 2008 has changed the world economic order or environments in multiple aspects. The goal of this study is to make an overall assessment of the changes in each aspect after the crisis, to forecast the direction of the further change, and to draw implications for Korea’s international economic policy. This study deals with the topic in four categories: overview of the crisis, changes in global governance, changes in advanced economies, and changes in emerging economies.
In Part I which overviews the crisis, we contrast the recent crisis with the Great Depression of the 1930s from the perspective of comparative history and examine fundamental causes of global imbalances which were an important background of the crisis. Part II discusses the changes in international economic order or global governance created by impacts of the crisis. The changes include the emergence of the G20 as a new international forum, the tendency of financial re-regulation, and the stalemate in international climate change negotiation. This part deals with also the rise of the G2 system as a global political order which was caused by the great resilience of the Chinese economy after the crisis. Part III covers the changes which happened in advanced economies in the post-crisis era. The notable changes are the crisis of the Euro system, widespread fiscal consolidations, and deterioration of economic inequality. Part IV examines the changes in emerging economies. Rapid recovery from the crisis in these economies is contrasted with stagnation in advanced countries. This two-speed recovery from the crisis enhanced the status and proportion of emerging economies. Internally, however, cracks in political order were often incurred as in the Middle East. In East Asia the greater Chinese economy created a substantial change in the regional economic integration framework. In conclusion the prospect of further changes in the world economy and their implications for Korean economy are provided.
The global financial crisis has worked as a momentum to accelerate structural changes which were already under way in the world economy. One of the most significant changes is the shift in the economic gravity from advanced economies to emerging ones. The other is rethinking of economic liberalization or deregulation movements which continued after the 1980s. These changes imply that capitalism requires its reformulation on the basis of new economic and social norms. However, it is highly susceptible whether such reformulations are actually in progress now.
It is also obscure whether a new global economic order is being re-established after the crisis. Although the shift in global economic power toward emerging economies brought about the creation of the G20, the governance seems too fragile and fluid to replace the old global order. Rather, the decline in the US hegemony and heightened tensions between the US and China appear to make global governance more unstable. In addition, regional integrations which were developing encountered a critical moment as shown in Europe and East Asia. Consequently, cooperative global governance seems most unlikely to be built up, reflecting the emerging multi-polar world economic system. The unlikeliness is attributed to the internal weaknesses of emerging economies, particularly China, which should work as a setter of new rules. The weaknesses include income inequality, political risk, lingering inflation, fragile financial system, and so forth. These factors are constraining the capacity or willingness for China to participate in making new global rules. In foreseeable future the world economy will spend time and efforts in managing the problems caused by the crisis with existing global orders dismantled but new norms unset.
Under these prospects for the world economic circumstances, Korea’s economic policy should be aimed at keeping the economic stability against possible external shocks. Particularly it needs to be prepared to absorb the volatile international financial markets and capital flows. As well it has to induce international cooperation in order to resist protectionist trade policies. Korea needs to intensify economic linkages with emerging economies, but also has to be cautious of their political risks. As for the East Asian economic integration, it needs to steadily engage Japan in the integration process and to circumscribe the leverage of China together with Japan.

Since reform and opening up, China could grow up greatly owing to continuous opening of the market and export-oriented economic development. In particular, processing trade that was a leader of export growth could play an important role at the Chinese economic development owing to the Chinese government's support policy. Since global financial crisis, economic uncertainty at home and abroad increased because of rapid decrease of overseas demand, Chinese Yuan appreciation, rise of wages and raw material price and negative cognition on processing trade, so that export processing enterprises made change of business paradigm from production and export oriented to domestic market.
To enter domestic market in China, export processing enterprises were forced to bear not only enterprise conversion cost but also risk of conversion to domestic market. The processing enterprises that is focused on export business shall pay conversion cost that is needed to investigate domestic market in China and to develop its own brand and to strengthen marketing business. When the processing enterprises does not apply transaction method in domestic market, payment terms and conditions, and entry cost into distribution channels to business management, it shall have very much high risks.
This study was focused on Guangdong province where export processing enterprises were crowded, and investigated export processing enterprises' entry into domestic market to examine success cases and to give strategy to enter domestic market in China and to support by the Korean government.
This study investigated development and policy changes of processing trade in China, changes of business model of export processing enterprises in Guangdong province and entry into domestic market in China by using various kinds of materials. The author interviewed not only business managers who made effort to convert into domestic market or to enter domestic market successfully but also local government officials in China, and gave practical information for businesses. The subject was 10 foreign capital export processing enterprises form Hong Kong, Taiwan and South Korea.
According to this study, the Korean export processing enterprises in Guangdong province was demanded to have business model that could meet actual conditions of the business, and to do R&D and innovate continuously and to make use of support policy of local government actively. And, the Korean government shall give political support for small export processing enterprises in Guangdong province to strengthen monitoring of systematic and non-systematic environment in important regions in China and to give guidelines for entry into the Chinese market and to set up regular channel with local government for keen cooperation.

Since reform and opening up, China could grow up greatly owing to continuous opening of the market and export-oriented economic development. In particular, processing trade that was a leader of export growth could play an important role at the Chinese economic development owing to the Chinese government's support policy. Since global financial crisis, economic uncertainty at home and abroad increased because of rapid decrease of overseas demand, Chinese Yuan appreciation, rise of wages and raw material price and negative cognition on processing trade, so that export processing enterprises made change of business paradigm from production and export oriented to domestic market.
To enter domestic market in China, export processing enterprises were forced to bear not only enterprise conversion cost but also risk of conversion to domestic market. The processing enterprises that is focused on export business shall pay conversion cost that is needed to investigate domestic market in China and to develop its own brand and to strengthen marketing business. When the processing enterprises does not apply transaction method in domestic market, payment terms and conditions, and entry cost into distribution channels to business management, it shall have very much high risks.
This study was focused on Guangdong province where export processing enterprises were crowded, and investigated export processing enterprises' entry into domestic market to examine success cases and to give strategy to enter domestic market in China and to support by the Korean government.
This study investigated development and policy changes of processing trade in China, changes of business model of export processing enterprises in Guangdong province and entry into domestic market in China by using various kinds of materials. The author interviewed not only business managers who made effort to convert into domestic market or to enter domestic market successfully but also local government officials in China, and gave practical information for businesses. The subject was 10 foreign capital export processing enterprises form Hong Kong, Taiwan and South Korea.
According to this study, the Korean export processing enterprises in Guangdong province was demanded to have business model that could meet actual conditions of the business, and to do R&D and innovate continuously and to make use of support policy of local government actively. And, the Korean government shall give political support for small export processing enterprises in Guangdong province to strengthen monitoring of systematic and non-systematic environment in important regions in China and to give guidelines for entry into the Chinese market and to set up regular channel with local government for keen cooperation.

I. Introduction

II. Empirical Regularities and Business Cycle Statistics
1. Empirical Findings on Asian Business Cycles
2. Business Cycle Statistics

III. Terms of Trade and Economic Fluctuations

IV. Durable-Goods Business Cycle
1. Characterization of Korean Durable-Goods Cycles
2. Market-Laddering and Financial Acceleration
3. Analytic Framework for Korean Durable-Cycles

V. Conclusion

References

Appendix

This paper investigates business cycles in Asia. Business cycles in developing small, open countries are different from those in developed small countries. Most interesting characteristics in developing countries are excessive consumption volatilities and strong countercyclical net export. Asia and Latin American developing countries share these characteristics. However, there are also differences in business cycles in both regions. We find that Asia shows less excessive consumption expenditure volatility to output than Latin American countries, and strong countercyclical net exports. More interestingly, the durable consumption is negatively related with net export in Asia (Korea), while Latin America (Chile) shows positive correlation. Moreover durable consumption shows a negative relationship with export and import while durable consumption in Latin America has positive relationship with export and import. We believe that there exist different transmission mechanisms in Latin America and Asia that connect consumption, net exports and export or import. We find that positive terms of trade shock increase the real GDP significantly in the short run for Latin America, but have no significant effects for East Asia. However, response of net exports to the terms of trade shocks is stronger and more persistent in Asia than in Latin America. This paper also present an analytic model that could explain the durable goods business cycles in Asia.
The model can explain durable business cycles in Asia (Korea) which generate strong procyclical durable consumption by the export-income channel with market laddering.

 

While the demand on rare earth resources called ‘the vitamin of industry’ as they are used in various sophisticated and green industries is expected to be on the rise in the future as new growth-driving industries will expand, a war on them is getting more fierce since they are really rare all over the world.
While China, the world’s largest rare earth resources-producing country, represents 97% of the total production in the world, it has failed to fully control them in a unified way, causing excessive development and disorderly competition, severely destroying natural environments in their producing areas, and having no voice in deciding their prices in the global markets due to stiff export competition among domestic companies.
So, the Chinese government has continued to unveil stronger restriction policies like recently limiting their exports in an attempt to have a voice for the global price of rare earth resources by effectively controlling them. In response, major consumers like Japan and the United States lose no time in taking proper measures.
This research predicted the future of the rare earth resources industry by analyzing China’s tightened restriction policies for its domestic industry, the responses of Korea and other major countries consuming them, and private companies’ cases and drew what implications they could have on South Korea. In order to do so, we took a simple close at first of all the characteristics, kinds, and usage of rare earth resources along with their industries as a whole from Introduction to the Second Chapter. In the Third Chapter, we dealt with what is going on in the rare earth resources industries across the world, the volume of their reserves and production, their demand and supply, and their prices. In the Fourth Chapter, we examined the current situations of China’s rare earth resources industries and tightened restriction policies. These restrictions include restructuring, restrictions on production and export, strengthened entry standards, and environment restrictions. In the Fifth Chapter, we looked at the measures of Japan, America, and Korea in response to China’s strategic policies. In case of Japan with no rare earth resources, the Japanese government was pushing hard for securing overseas resources, recycling, and developing alternatives, but the United States, which has domestic rare earth resources, focused more time and energy on developing its local resources. In addition, America along with Mexico filed a suit to the World Trade Organization against China’s restrictions on exporting them and is making positive efforts to diversify its import lines through M&A, bring up related experts, and step up technology cooperation. While the Korean government has taken a variety of steps such as the exploration of domestic resources, the development of overseas resources, the stepping-up of R&D and global cooperation, the expansion of reserves, and the recycled use, it is still slow in working with other countries and has not yet to secure processed technology indispensible to producing those resources. That is why a number of short and long-term efforts should be made. The Sixth Chapter handles private companies’ cases. As for Korea, this research analyzed the case of POSCO, which advance into Baotou in the autonomous province of Neimemggu and the case of Korea Resources Corporation, which make investments in Xian in the province of Shaanxi, and for China, this research analyzed the cases of the two powerful companies, Baogang Rare Earth in the north and Wukuang Rare Earth in the south. Lastly, we made a conclusion based on those analyses and drew the implications it could have on the Korean government and companies.
The implications for the Korean government this research has drawn are as follows. First, in order to prepare for rapidly changing conditions in the world’s rare earth resources markets and satisfy increasing demand at home, Korea should strategically select one or two nations and develop overseas resources as it needs to secure mines. Second, Korea, which is lacking in not only top-class processing technology capable of producing a high value products but technology related to refining and separation fields, should carry out research and developments at home while solidifying international technology cooperation. Third, Korea, which doesn’t have sufficient experts on rare earth resources and any specialists who could bring up those experts, should educate expert manpower through the education course for experts which must be backed up by the R&D designed to develop manpower. Fourth, a resource recycling is needed for reducing green house gas emissions as well as securing rare earth metal resources. Fifth, while Korea should build up an effective information network and fully grasp the cycle of rare earth resources at home, it needs to secure information on the prediction of global supply and demand in the world. Sixth, as completion for global rare earth resources is getting more severe, Korea should cope positively with changes in supply and demand at home and abroad by pushing ahead with strategic reserves. Seventh, Korea should build up cooperation channels among governments.
As far as private companies are concerned, they need to move their production bases to China in order to secure stable supply lines and at the same time they should diversify their import lines. In addition, technology does really matter, so it is self-evident that they should do everything in their power to secure technology given in particular that China, which limits the entry of foreign investment companies for the rare earth resources industry, is encouraging non-Chinese companies to invest in in-depth process and applied fields. Besides, it could be another strategy to circuitously advance into China’s rare earth resources industry by means of stepping up cooperation in the field of green industries with China. The two nations will be able to have a lot of room for cooperation since those resources are an integral material of the green industries and Korea and China are positively growing them as a new industry in a strategic way.