In 2010, those of us at KIEP had designated four main research topics we deemed most pertinent to current circumstances, and engaged in twenty major projects in line with those topics. These include negotiations for liberalization of the services market and other multilateral trade issues in response to WTO regime reforms and other changes in the world trading environment; economic cooperation in APEC and other regional issues; and current bilateral trade issues including free trade agreements. KIEP conducted research to address changes in the macroeconomic environment surrounding Korea, such as changes the internationalization of the Korean won as a result of Korea's increasing prominence on the international economic scene, and presented basic resource materials and provided directions to prepare for changes in North Korea. Policy responses to global inequalities in light of the current rapid transnational movement of capital were forwarded, in addition to measures to facilitate Korea's entry into foreign markets and attract foreign investment. In recognition of rising demand for research on the world's regions, KIEP did not limit itself to providing data on Korea's major trading partners such as the US or China, but made efforts to provide basic data on Central/South America and Africa that had hitherto been lacking.

 

2010 Annual Report

Policy Analysis/Conference Proceedings/Studies in Comprehensive Regional Strategies/Regional Study Series/Trade and Investment Study Series/Policy References/Working Papers/CNAEC Research Series/SNU-KIEP EU Centre Research Series

2010 Summaries of Research Reports

2010 Summaries of Research Reports

As global climate change is more severe and the need to reduce using fossil fuels is increasing, the development of alternative energy sources has been active in the world, and photovoltaic (PV) industry is one of the most emerging industries as a new growth-driving industries. China has become a No. 1 country which manufactures and exports PV-related products most in the world since 2007 and its domestic market will also grow rapidly in the future.
The existing researches about Chinese PV industry in Korea has covered development status, problems, marketing opportunities and market entry strategy at macro level. But the various region-specific in-depth studies are also needed so that we can explore the opportunities of entering local market or cooperate with local companies in China. The purpose of this study is to analyze the status and growth determinants of PV industry and enterprises in China through case study of Jiangsu Province and to provide some implication to Korean government and enterprises. To this end, we visited Nanjing, Wuxi, Changzhou, Xuzhou and Lianyungang and carried field research three times from July to November, 2010.
Chapter 2 examined the status and features of Chinese PV industry and major policies. Chapter 3 analyzed the status of PV industry in Jiangsu Province. Jiangsu Province is one of leading provinces which develop PV industry in China and has many global companies including six overseas IPO companies. Especially in case of solar cells, 70% of China and 25% of world production is being produced in Jiangsu Province. And compared with that of other regions, all sectors in the PV industry value chain are well developed in Jiangsu Province, which has extensive production experience. However, PV companies are concentrated in southern regions within Jiangsu Province, and fierce competition among cities developing PV industry clusters can have an adverse effect on the regional economy. Chapter 4 analyzed the cases of SunTech, TrinaSolar, Sunlink PV, and GCL and proved that entrepreneurship and the support of local government had played an important role in their growth.
Finally, the implications for government and businesses were provided. For the development of PV industry and enterprises, Korean government need to come up with various measures to provide fund for venture companies, to establish PV industry cluster which differentiated in each region, and to expand the domestic PV market. As for business, Korean enterprises can export products directly from Korea to China if their products have competitiveness, while they can merge/acquire local companies or establish new company in China if their products have less competitiveness. In addition, when Korean enterprises enter the Chinese PV market or cooperate with local PV companies, they need to establish business strategy which can make the best use of characteristics of local market.

Acknowledgement
Contributors

1. The Sphere of Services as the Main Factor of Maintenance Employment and a Diversification of Economy of Uzbekistan / Tagaev Behzod
Introduction
Body
Conclusions

2. Education for Development: India and East Asia / Shovan Ray
Introduction
Literacy Imperatives Around the World: A Brief Sketch
The Chinese Experience
Prologue on Japan
Taiwanese Experience
The South Korean Experience
The Indian Experience
Contributions to Endogenous Growth Theory and HumanDevelopment
Conclusions

3. Free Trade Agreement between Korea and Turkey:Challenges, Opportunities and Economic Cooperation / Mahmut Tekce

Introduction
Economic Relations between Korea and Turkey
Turkey’s Trade Policy in the Context of the EU’s Free TradeAgreements
Effects of Korea-Turkey FTA: Risks and Opportunities
Potential Exports to Korea for Turkish Products
Beyond a Free Trade Agreement: Economic Cooperation between Korea and Turkey
Conclusion

4. ASEAN Economic Community: Prospect for Regional Monetary Cooperation in East Asia / Umi Karomah Yaumidin
Introduction
ASEAN Economic Community
The Prospectus of Regional Monetary Cooperation
Future Implications for Indonesian and Korean Monetary and Fiscal Management
Concluding Remarks

5. Cross-Strait ECFA Should be the Stepping Stone for Taiwan Joining in the East Asia Economic Integration / Chaw-Hsia Tu
Introduction
Economic Thinking of ECFA and the Possible Impacts on Cross-Strait Relations
ECFA and the Economic Effects on Taiwan
Policy Implications for other East Asia Countries
Conclusions

6. Korea's FTAs and their Implications for the Korean Wine Market / Timothy John Beal
Introduction
Korea's FTAs and their Implications for the Korean Wine Market
Conclusion

7. Korean Trade and Political Risk / Whitney Haring-Smith
Introduction
International Country Risk Ratings
Korea’s County Rating Systems
Comparison of Korea ExIm Bank Rating System to International Rankings
Korea’s Increasing Exposure to Country Risk
The Export-Import Risk Gap
Korean FDI Exposure
Case Study Review
POSCO in India
Daewoo Logistics in Madagascar
Conclusions

8. Research on Exit and Transformation of China’s Economical Stimulus Policies in the Post-Crisis Era / Du Feilun
Introduction
China’s Macroeconomic Stimulus Policies after the InternationalFinancial Crisis
The Conditions of China’s Economic Stimulus Polices Exit
The Route of China’s Economic Stimulus Polices Exit
The Direction of China’s Economic Policies Transformation in the Post-Crisis Era
Conclusion

9. Research on the Urbanization Problem of South Korea / Huang Zhengxue
Introduction
The Phase of Urbanization Development
To Upgrade Industrial Structure
To Improve the Structure of the Urban Hierarchical System
To Enhance the Construction of Infrastructure
Coordinated Development Between Urban and Rural Areas
To Play the Role of Government
Conclusion

Korea Institute for International Economic Policy (KIEP) has expanded its cooperative relations with the world since it took the role of the hub of regional studies in public research areas of Korea. As a part of our systematic efforts to foster international exchanges and build the knowledge based through interdisciplinary collaboration, The Center for Regional Economic Studies (CRES) initiated a researcher-exchange program called CRES Visiting Fellows Program in 2008. The program brings together influential professionals from academia and the public sector to advance individual, institutional and national understanding of regional economic matters and to improve international cooperation on related research. This volume is a part of our achievements through the program and we hope this proceeding would work as another channel to deepen the understanding of regional economies in Korea.

Japanese government and enterprises have been reorganizing and rebuilding their expansion strategy into Asian emerging market since the global financial crisis that hit the world in 2008. The Japanese government has made it clear that they were willing to increase their infrastructure exports and take the initiative in Asian sub-regional development programs, and support BOP (Base or Bottom of the Economic Pyramid) business of their enterprises in Asia’s emerging markets. Japanese manufacturing firms have also gradually been changing their traditional marketing strategy of concentrating on high-end products into one with increased focus on low-end and low-price products for Asia’s emerging markets.
This report sheds light on the Japanese government and enterprises’ strategies for expanding into emerging markets in Asia. To begin with, in chapter 2, we look into the background context of change in Japanese government and corporate strategies for Asia’s emerging market since the global finance crisis. We place emphasis on the fact that both the economic potential of Asia’s emerging markets and the limited prospects for the future Japanese domestic market are what motivated the reorganization and rebuilding of Japan’s expansion strategy. Second, we analyze the Japanese government’s Asian market strategy, focused on the support policy involving ‘package-type’ infrastructure export, which the Japanese government has accepted as one of their principal course of action for the Asian market in the ‘New Growth Strategy’, along with the BOP business support policy for Asia’s emerging markets. Third, in chapter 4, we pick up on and analyze the Asian sub- regional development programs in which the Japanese government is attempting to take the initiative. These include, for example, the Comprehensive Asia Development Plan (CADP) and Delhi-Mumbai Industrial Corridor (DMIC) project, and the Indonesia Economic Development Corridor (IEDC) project. Fourth, we investigate the changes in strategies of Japanese manufacturing firms and their focus on the low-end/low-price strategy for Asia’s emerging markets. We regard this strategic change as an inevitable response on the part of the Japanese to their weakening competitive position in Asia’s emerging markets.
Some implications for Korean government and manufacturing firms can be drawn from the reports in the above analysis. First, we suggest that the Korean government and manufacturing firms need to strengthen their competition strategy but also, implement a cooperation strategy with their Japanese counterparts at the same time. Second, the Korean government needs to work out effective ways of getting involved in Asian sub-regional development programs, considering that the Japanese government is attempting to take the initiative in these programs. Third, we suggest that the Korean government establish ‘BOP business support centers’ to provide information on Asia’s emerging markets for Korean enterprises, and to match Korean enterprises’ manufacturing capability with local demand, and so on. Finally, we suggest Korean enterprises should be more active in promoting their products to local markets, and strengthen their localization strategy to prepare against low-end/low-price strategy that will be employed by Japanese manufacturing firm’s in Asian markets.

Preface /Wook Chae

Contributors

Introduction and Overview / Lee-Jay Cho

1. A Northeast Asian Bank for Cooperation and Development: Revisited / Lee-Jay Cho and Stanley Katz
1.1. What Area would the Bank Cover?
1.2. Developing a Regional Transportation and Logistics System
1.3. Natural Gas as a New Energy Source
1.4. Developing Telecommunication Infrastructures
1.5. The Rationale
1.6. Who Pays?
1.7. Some Political Implications
Conclusion

2. Role of Northeast Asia after Crisis and NEABCD / Rak Yong Uhm

3. In Support of a Regional Development Bank in Northeast Asia: Provision of Regional Public Goods / Chung Lee

4. The Establishment of the NEADB and the Countermeasure of Local Government: From Conception to Promotion / Li Gangzhe
4.1. Preface: From Conception to Policy
4.2. Suggestions for the Establishment of NEABCD
4.3. Basic Assumptions for a NEABCD
4.4. Strategies and Action Programs for Implementing a NEABCD
4.5. The Possibility of the Establishment of a NEABCD and the Participation of Local Governments

5. Key Points of the Proposal to Establish and Manage a NEABCD / Jaewoo Lee
Introduction
5.1. Justification for the Establishment of the NEABCD
5.2. Required Public Funding and Financial the Gap in Northeast Asia
5.3. Issues Surrounding the Establishment of the NEABCD
5.4. NEABCD Operations
Conclusion: Future Research Plans

6. Korea Eximbank’s Plan for Financial Cooperation in Northeast Asia / Jai Min Lee
6.1. Brief Description of the Export-Import Bank of Korea
6.2. Plan for Financial Support in Northeast Asia Development
6.3. Financing Instruments
6.4. Cooperation between Kexim and NEABCD
Summary and Conclusion

7. The Prospects of the Northeast Asian Bank for Cooperation and Development / Tsuyoshi Saito
Introduction
7.1. Background
7.2. Northeast Asian Bank for Cooperation and Development
7.3. Responses of Countries and Different National Interests
7.4. Benefits and Problems for Japan
7.5. Future Tasks: What Needs to be Pursued?
Conclusion and Implications

8. Strengthening Northeast Asian Financial Cooperation and Promoting Regional Common Development / Du Qiang
8.1. Background
8.2. Tianjin Promotes Financial Reform and Innovation
8.3. Enhancing Financial Exchange and Cooperation in Northeast Asia
Conclusion: Cooperation to Improve the Regional Financial Reform and Innovation 1

9. Financing and Project Management of Cross-border Project of the World Bank and the Asia Development Bank / Ma Junlu
9.1. Introduction to the World Bank Cross-border Projects
9.2. Case Analysis of World Bank’s Cross-border Infrastructure Projects
9.3. Project Finance and Project Management of Asian Development Bank
9.4. A Case Study of Capital Raising and Management of ADB’s Cross-Border Program

10. Asian Financial Cooperation and Asian Bond Fund 2 / Jai Woong Lee
Introduction
10.1. Asian Financial and Economic Integration: Organizational Behavioral Approach
10.2. Multilateral Asian Cooperative Framework: APEC, ASEAN+3, EMEAP and ASEM
10.3. Characteristics of ASEAN+3 East Asian Countries
10.4. EMEAP (Executives Meeting of East Asia and Pacific Central Banks) and Asia Bond Fund (ABF)
10.5. ASEM as Coordinator between Asia and EU (European Union)
10.6. Performance of Asian Financial Cooperation
10.7. Recent Implementation of the Asian Bond Fund 2
10.8. Future Forecasting

11. Memorandum: NEADB－Future Work & Fast-TrackApproval / Stanley Katz

Summary and Conclusion

Appendix: Agendas and Ulaanbaatar Declaration

The Northeast Asian region is one of the most dynamic economic regions in the world, which includes the major players of China, Japan and Korea, with productive linkages to resource-rich Russia and Mongolia and to the United States. In contrast to the region’s robust economic growth regional security has long been fragile, mainly due to the geopolitical condition resulting from the Cold War era.
  If the countries in Northeast Asia wish to further their development and prosperity, they will have to learn to harness their dynamic economies and create a region in which peaceful coexistence and common prosperity prevail. Northeast Asia has a northern subregion that includes North Korea, Mongolia, the Russian Far East, and the northeastern provinces of China - an area that is well- endowed with latent natural and human resources. This subregion has the potential of becoming an important source of natural resources for the entire region, and what is needed is to realize that potential through infrastructure investment.
  Energy security and environment is for example, an important area of cooperation, as the three major countries are heavily dependent on energy imports and are highly vulnerable to energy crisis. Financing requirements for the necessary cross-border infrastructure are likely to be large, and a regional development bank is a key in meeting that financing need.
  This volume, which is a sequel to the first volume, Financing for Regional Economic Integration for Northeast Asia, is comprised of papers, research reports and summaries of a main conference and several specialized meetings, as well as affiliated activities, that took place under this project. The results of this project represent a considerable beneficial to the region and have been carried out in a spirit of cooperation that we esteem.

In 2009, those of us at KIEP had designated four main research topics we deemed most pertinent to current circumstances, and engaged in twenty major projects in line with those topics. These include negotiations for liberalization of the services market and other multilateral trade issues in response to WTO regime reforms and other changes in the world trading environment; economic cooperation in APEC and other regional issues; and current bilateral trade issues including free trade agreements. KIEP conducted research to address changes in the macroeconomic environment surrounding Korea, such as changes the internationalization of the Korean won as a result of Korea's increasing prominence on the international economic scene, and presented basic resource materials and provided directions to prepare for changes in North Korea. Policy responses to global inequalities in light of the current rapid transnational movement of capital were forwarded, in addition to measures to facilitate Korea's entry into foreign markets and attract foreign investment. In recognition of rising demand for research on the world's regions, KIEP did not limit itself to providing data on Korea's major trading partners such as the US or China, but made efforts to provide basic data on Central/South America and Africa that had hitherto been lacking.