Executive Summary Ⅰ. Introduction Ⅱ. Measuring Industry Participation and Position in GVCs 2.1. Industry Participation in Vertical Specialization Linkage: Backward and Forward Participation Rates 2.2. Industry Position in Production Line: Upstreamness and Downstreamness Indices Ⅲ. Industry Participation and Position in GVCs: Statistical Observations from APEC Member Economies 3.1. Forward and Backward Participation Rates 3.2. Upstreamness Index Ⅳ. The Value-added Creation Effect of GVC Participation: An Empirical Investigation for APEC Member Economies 4.1. Model Specification 4.2. Data and Summary Statistics 4.3. Empirical Results 4.4. Policy Implications Ⅴ. Summary and Concluding Remarks References Appendix

We analyze the value-added creation effect of GVC participation by applying a standard fixed effects regression model analysis with economy-wide country-industry data. We use OECD Inter-country Input-Output Tables covering 64 countries (21 APEC members and 43 non-APEC members) and 35 industries (1 Agriculture, forestry and fishing, 3 Mining, 16 Manufacturing, and 15 Service) between 2005 and 2015. We find that APEC member economies’ participation in GVC activities is not distinct from non-APEC member economies but the causal relationship between GVC participation and created domestic value-added is much stronger in APEC member economies. More specifically, from the qualitative evaluation on statistical data, we find that backward linkage has been stronger than forward linkage and both have been recently decreasing. The APEC industries’ upstream positions in production line have been slightly more distinguished than non-APEC industries. From the econometric regression analysis, we find that forward participation in GVCs is more desirable than backward participation in terms of creating domestic value-added. We also find that the industry position in middle stages of production line in contrast to earlier and later stages creates higher domestic value-added per output unit. This implies that the firm-specific conventional U-shaped “Smile Curve Hypothesis” is not applicable at the economy-wide country-industry level, especially in APEC member economies. This finding supports that manufacturing industries are still a major driving force for less developed APEC member economies to move up the development ladder. Considering that gains from GVC participation are diversified across industries and upgrading country-industry positions in GVCs is competitive among the interconnected countries, we strongly recommend for APEC member economies to construct effective domestic value chains and coordinate with other members during their process of upgrading GVC participation.

   Mongolia is one of the world’s top 10 resource-rich countries, with high growth potential based on abundant mineral resources such as copper, gold and coal on its vast land, which is more than seven times the size of the Korean Peninsula. It has received much attention due to its geopolitical importance in Northeast Asia, and is actively promoting cooperation with the United States, Korea, Japan and European countries in addition to Russia and China. It is also expected to play a certain role in promoting peace and stability on the Korean Peninsula as a country of simultaneous diplomatic relations between the two Koreas. However, Mongolia has a population of around 3.3 million and its income level is not high, and thus the small market remains limited in size. As of 2019, Mongolia’s total GDP is about $14 billion, and per capita GDP at just over $4,200. There are also various constraints and difficulties in transportation as a land-locked country.
   Nevertheless, the strategic value and importance of Mongolia should be highly valued. The first reason is that the Mongolian economy has high potential for future development. Many international organizations predict that Mongolia will be able to achieve economic growth of around 6% annually in the future based on abundant resources. In terms of economic structure, resource-rich Mongolia and Korea, where technology and capital have a comparative advantage, can form a complementary relationship. Second, Mongolia has been regarded as a country that achieved political democratization since it switched to a market economy in 1990, and has been improving its international status through China-Mongolia-Russia cooperative relations. Northeast Asia is an area where the need to establish a multilateral peace and security system is growing. Strengthening friendly relations with Mongolia and sharing the vision of future cooperation are also in line with the direction that Korea’s New Northern Policy is pursuing. Third, Koreans and Mongolians share cultural friendliness and emotional bonds with each other. Currently, nearly 50,000 Mongolians in Korea form part of Korean society, and historically, they have called Korea “a country of rainbow” and expressed friendly sentiment. In Mongolia, interest in the Korean language is as high as that for English and Japanese, and the Korean Wave is also quite strong in popular culture. Emotional friendliness and amicable feeling are important factors as the basis for future cooperation between the two countries.
   Korea already accounts for a high proportion of Mongolia’s economy in terms of trade volume and direct investment. Mongolia is the second-largest ODA partner for Korea and continues to share the development experience of the Korean economy. With bilateral summits and high-level talks continuing since the establishment of diplomatic ties, the two countries currently have a ‘comprehensive partnership’ and are seeking to upgrade to a “strategic partnership” in the future. Mongolian students studying in Korea rank third in terms of the size of foreign students, and they are growing as resources to take charge of the future of bilateral exchanges and cooperation. A group of Mongolian students studied in Korea, and many pro-Korean figures have organized a human network to assume the role of a channel for civilian diplomacy between the two countries.
   Under the global economic environment that has entered a low-growth era, Korea is pushing its New Northern Policy to seek new growth engines. Many of Korea’s main industries are now in their mature stages and need a new breakthrough, with northern countries likely to form complementary ties with the Korean economy due to their wide territory and abundant resources. Korea also needs to strengthen transnational multilateral cooperation with Eurasian countries to promote peace and prosperity on the Korean Peninsula amid geopolitical tensions and competition in Northeast Asia. Mongolia is an important partner in this situation which is highly likely to cooperate with Korea, has high demand for energy, is interested in the development experience of Korean economy, and shares mutual cultural familarity with Korea.
   In the 21st century, Mongolia once gained attention as it recorded rapid growth due to rising international resource prices. However, as the resource-based economy suffers from economic instability due to its limitations, the Mongolian government continues to push for an economic diversification policy. Mongolia established the “Long-Term Development Policy Vision 2050” in 2020, and is presenting the main goals and future plans that the country aims for. Many of the policies being pursued here are directly or indirectly in line with the direction of Korea’s New Northern Policy, and we should seek cooperation tasks to meet the demands of both countries and broaden the horizon for future cooperation. Given the policy direction that the two countries are pursuing, the vision of future cooperation between Korea and Mongolia is presented as an ‘Inclusive Shared Growth’ that will achieve peace and prosperity in the 21st century in Northeast Asia. This is because Mongolia is recognized as a member of the Northern Economic Community in the 21st century, and it is a country that needs comprehensive support from Korea while cooperating with each other.
   Marking the 30th anniversary of the establishment of diplomatic ties between Korea and Mongolia, the study was designed to explore future cooperation tasks and ways to realize them in each field. The purpose of this study, which takes the form of comprehensive regional research, is to analyze the achievements and limitations of Korea-Mongolia exchange cooperation in each field that has been carried out so far based on the cooperative environment between the two countries, and to present measures for finding and realizing cooperation tasks to overcome the problems and limitations that arise there.
   This research consists of seven chapters, including introduction and conclusion. The first section of Chapter I describes the background and necessity of the study, focusing on the strategic value and importance of Mongolia. Based on the common denominator of Korea’s New Northern Policy and Mongolia’s Long-term Development Policy, the two countries are setting the direction and vision for future cooperation. In the second section, the contents of the preceding study are reviewed and the contributions of this study are presented, focusing on the literature of Korean, English and Mongolian, and in the third section, the research methods and contents are explained.
   Chapter 2 deals with the characteristics of the Mongolian economy and the challenges in Korea-Mongolia economic cooperation. In the analysis of the economic cooperation environment for the first section, the contact point of the two countries’ economic cooperation is being sought first through the characteristics of Mongolia’s resource-based economy. To overcome the instability of the resource-based economy, Mongolia is pursuing an economic diversification policy, which could be an important point of contact for the bilateral economic cooperation. Also, the Mongolian economy has a good long-term growth outlook, which increases the possibility of future cooperation between the two countries. Section 2 analyzes the achievements and limitations of economic cooperation between the two countries in terms of trade and investment cooperation. Although Korea is one of Mongolia’s top five economic cooperation partners, there is still a limit to trade and investment volume, and Mongolia is looking for ways to improve the situation through the Mongolia-Japan EPA. Section 3 presents the vision of economic cooperation between the two countries as “Inclusive Shared Growth,” proposing the promotion of EPA and the establishment of a proper technology transfer center as a practical measure to promote economic cooperation.
   Chapter 3 deals with the tasks of Mongolia’s industrial policy and Korea-Mongolia industrial cooperation. The first section analyzes the cooperative environment between the two countries through analysis of Mongolia’s industrial structure and industrial policies, and analyzes the current status of Mongolia’s major industries such as mining, agriculture and livestock, manufacturing, and tourism. Mongolia’s “Long-Term Development Policy Vision 2050” suggests the direction of national industrial policy, which includes the selection of major strategic industries, including the fourth industrial revolution technology. Mongolia, with its vast national territory, values the development of specialized regional industries, and thus analyzing Mongolia’s regional industrial policies is also an important task in bilateral industrial cooperation. Section 2 analyzes the achievements and limitations of bilateral industrial cooperation, including Korea’s ODA. Although there are still many small and medium-sized investments to Mongolia, investment of large companies has also been on the rise recently, and the connection between the two countries’ industrial cooperation through ODA is also important. Section 3 examines the bilateral industrial cooperation tasks in Mongolia’s major industries and fourth industrial revolution technologies, and suggests measures such as boosting technical support, dialogue and cooperation channels, and strengthening the value chain of industrial cooperation.
   Chapter 4 deals with Mongolia’s political diplomacy and Korea-Mongolia cooperation tasks. The first section analyzes the political and diplomatic cooperation environment between the two countries through the analysis of Korea’s northern policy and the characteristics of Mongolia’s political diplomacy. Korea has been pursuing the Northern Policy since the late 1980s, and Mongolia is believed to have maintained its own important position under previous administrations. Mongolia operates under a dual-governance system and has a unique political system, and is considered to have a well-connected national security and foreign policy while pursuing a pragmatic diplomatic line of “The Third Neighbor Policy.” Section 2 deals with the achievements and limitations of bilateral cooperation in the political and diplomatic sectors, and the exchange and cooperation between the two governments have been developed repeatedly as summit diplomacy and high-level talks continue even amid regime changes. Section 3 deals with bilateral political and diplomatic cooperation projects, focusing on multilateral transnational projects, including participation in China-Mongolia-Russia linked projects, and plans to participate in the Northeast Asia Super Grid project.
   Chapter 5 explores approaches to expand human exchanges and cooperation between Korea and Mongolia. Section 1 examines the current status of human exchanges between the two countries and the environment of cooperation through analysis of the reasons for the expansion of human exchanges. The number of Mongolians living in Korea has reached 50,000, and Mongolian students studying in Korea have been on the rise. The reasons for their choosing Korea to study are also analyzed in various ways, including economic income and cultural friendliness. The number of Koreans visiting Mongolia has also increased significantly recently due to the demand for travel, and the Korean community in Mongolia continues to maintain its size. Section 2 presents quantitative and qualitative achievements of bilateral human exchanges, and analyzes the obstacles to expanding human exchanges. Human exchanges between the two countries are diversifying and deepening due to the establishment of pro-Korean organizations in Mongolia, active activities of Mongolian student organizations studied in Korea, and exchanges between Korean and Mongolian scholars. However, there are obstacles to be solved, such as visa problems, unregistered Mongolian residents in Korea, and a lack of airline availability. Also, by looking at examples of exchanges between Mongolia and Japan provides several implications for promoting exchanges between Korea and Mongolia. Section 3 deals with ways to promote bilateral human exchanges. First of all, measures such as an asymmetrical visa exemption system, the use of work-tourism visas, and an open-sky agreement are proposed as countermeasures against obstacles to human exchanges. Furthermore, to expand and diversify human exchanges between the two countries, the establishment and utilization of human networks and the establishment of a Korean center are comprehensively proposed.
   Chapter 6 deals with cooperation tasks in the Korean-Mongolian language and culture fields. The first section analyzes the cooperation environment between the two countries based on their understanding of Mongolian language and culture. The Mongolian language incorporates the traditional Mongolian nomadic culture, so understanding it will also help the two countries cooperate in the political and economic sectors. The Korean language has a deep linguistic relationship with the Mongolian language, too. The second section analyzes the achievements and problems of bilateral cooperation in language and culture through how Mongolian and Korean studies have been educated and studied in both countries, respectively. Korean is being selected as a major in many Mongolian universities, and Korean language education for the general public is also being activated through the King Sejong Institute. There are two universities in Korea that have established Mongolian programs as a major for their students, and research is also being activated to find the origin of Korean culture in the cultural field. In the third section, measures to promote language and cultural exchanges are discussed, including the establishment of a comprehensive Korean cultural platform, the strengthening of the excellent teacher dispatch system, and the expansion of the Mongolian cultural research support system.
   Chapter 7 presents the conclusion of the study and our suggestions. In Section 1 the main points of the study are summarized, establishing the vision for future cooperation between the two countries. Based on the vision of future cooperation, the second section presents major cooperation tasks and realization measures, such as tasks and measures to revitalize economic cooperation and industrial cooperation, political and diplomatic cooperation tasks and realization measures, and tasks and measures to promote human and cultural exchanges.
 

  This report reviews the preliminary judgments of the CJEU on the interpretation of the EU GDPR and compares them with Korean laws and precedents in order to derive implications related to the validity of passive consent, the basis for the transfer of personal data abroad, and the content and scope of application of the right to be forgotten. The CJEU have ruled that passive consent, such as preselected check boxes, is not a valid agreement. In addition, the ombudsperson mechanism which cannot make any decisions binding on intelligence agencies is not effective judicial redress. That is why the Privacy Shield, which was the basis for the transfer of personal data between the EU and the United States, is invalid. Finally, the deletion from search engines based on the right to be forgotten is restricted to the EU region, not the entire world.
  By comparing those precedents of the CJEU with Korean laws and precedents, the report provides the following implications. First, the passive consent was interpreted as invalid even if it was in accordance with Korean laws. Besides, the precedent is also in the same position, which shows important criterion was whether the data subject could objectively confirm the intention of the data subject. However, since Korean laws are less specific than the EU GDPR, it seemed necessary to supplement them. Second, the transfer of personal data to third countries or international organizations was allowed only when the data subject agreed. Otherwise, the EU GDPR recognized various other reasons besides the consent of the data subject. It is time that the supervisory authorities of Korean law should consider whether to allow other basis for the transfer of personal data or not. Last, there was a ruling that the right to be forgotten has not yet been introduced into Korean law. The right to correct and delete in Korean law is recognized only if the information is incorrect after the exercise of the right to read, and there is a difference from the right to be forgotten. Discussions on whether to introduce the right to be forgotten are needed.

국문요약 

제1장 서론 
1. 연구의 목적과 필요성
2. 연구의 구성과 내용

제2장 디지털세에 관한 국제 논의 동향 
1. 논의 배경 
2. OECD/G20의 BEPS 논의 
3. European Commission 제안

제3장 다국적기업의 조세회피에 관한 경제학의 선행연구 
1. 세원잠식과 소득이전(BEPS) 
2. 다국적기업 조세회피의 경제적 영향

제4장 디지털세에 관한 최근 연구 
1. 디지털 플랫폼 시장: 양면시장 
2. 양면시장의 최적조세효과: 종가세 vs. 종량세
3. 사용자 데이터를 활용하는 디지털 플랫폼과 조세효과
4. 과세권 배분 기준에 따른 조세효과 
5. 디지털 서비스세의 경제적 효과 

제5장 결론 

참고문헌 

Executive Summary 

   As the digital economy progresses, there is growing concern regarding the issue of tax avoidance by multinationals. Since firms rely heavily on intangibles and yield profits without permanent establishments in the digital economy, the so-called Base Erosion and Profit Shifting (BEPS) phenomenon is likely to grow worse as such tax avoidance by multinationals becomes more prevalent and elaborate. Working within the OCED/G20 Inclusive Framework on BEPS, over 135 countries are collaborating to reach an agreement by the end of 2020, and many economies including European countries have been introducing digital services tax.
   This paper surveys the literature on the economic impact of tax avoidance by multinationals, reviews international discussions on the BEPS project and digital services tax, and provides, by suggesting directions for future research, references for government to prepare countermeasures for the introduction of the BEPS project and digital services tax by other countries. Chapter 2 covers recent discussions on the OECD/G20 BEPS project, the European Commission’s corporate tax reform, and introduction of digital services tax by many countries. The key points of the “Two-pillar approach” discussed at the OCED/G20 are profit allocation using a predetermined formula and ensuring a minimum level of effective taxation. Since the cessation of discussions on corporate tax reform at the European Commission, many European countries have been independently introducing digital services tax targeting digital enterprises with high profits. Chapter 3 surveys the literature on the magnitude and economic impact of BEPS. Previous papers find that an increase in corporate tax rates differentials between home and a tax haven would raise subsidiaries’ profits, but the magnitudes become lower as the quality of data and methodology improve. They also report the evidence of manipulation of transfer price and relocation of intellectual property to a tax haven based on tax rates differentials between home and a tax haven. According to papers that analyzed the impact of tax avoidance on price, output, and consumer welfare, welfare increases with tax avoidance in countries with a high tax rate, while it tends to decrease in countries with a low tax rate. An increase in corporate tax rate, however, generally has a negative effect on firms’ productivity, investment, and innovation. Chapter 4 reviews recent studies on digital tax and online platforms in two-sided markets. In two-sided markets, platforms react to taxation by taking account the indirect network effect, which refers to interaction between incentives of users on each side to participate in the platform. A platform would respond to tax by reducing price on one side if the market has large indirect network effect. Recent studies show that the impact on platform’s pricing and fiscal revenue of taxing a two-sided platform varies depending on the magnitude of indirect network effect. Based on this extensive literature review, this paper concludes with suggestions for future research direction. It will be worthwhile to explore avenues like tax incidence, investment effects of digital tax, impact analysis at industry level, trade conflicts arising from introducing digital services, and changes in international standards for the digital economy.
 

Preface Executive Summary Contributors Chapter 1. Introduction 1. The Birth of the Income-led Growth in Korea 2. About this Report Chapter 2. Is the Korean Economy in a Wage-led or Profit-led Growth Regime? 1. Introduction 2. Measuring Labor Income Share 3. Effects of Labor Income Share on Aggregate Demand 4. Labor Income Share and Consumption 5. Labor Income Share and Investment 6. Labor Income Share and Net Exports 7. Labor Income Share and Aggregate Demand 8. Concluding Remarks Chapter 3. The Structure of the Income-led Growth Policies of the Moon Jae-In administration 1. Basic Scheme 2. Policy Composition and the Three Pillars 3. Additional Discussions Chapter 4. Economic Performances of the Income-led Growth 1. GDP and Its Main Components 2. Employment 3. Income Distribution 4. Fiscal Expansion Chapter 5. The Minimum Wage Debates in Korea 1. Introduction 2. Initial Criticisms and Some Evidences Against Them 3. Employment Effects of the Minimum Wage Raises in 2018 and 2019 4. Impact of the Minimum Wage Raises in 2018 and 2019 on Wages and Income 5. Change of Direction 6. Conclusion Chapter 6. Assessment of the Social Safety Net Policies 1. Background 2. Reforms of the National Basic Living Security System 3. Reinforcement of the Basic Pension 4. Child Benefits, Youth Welfare, Unemployment Assistance and Housing Welfare 5. Social Services and Welfare Delivery System 6. The Mooncare Chapter 7. Transition to an Inclusive Regime of Industrial Relations 1. Introduction 2. Economic Impacts of Labor Market Institutions 3. Labor Unions and the Collective Bargaining System 4. System of Extending Collective Agreements 5. Institutional Improvement in the Korean Labor Market 6. Alternative Labor Policies for Income-led Growth References

   Income-led growth is at the core of the Moon Jae-in administration’s economic policy. It aims to build an inclusive economy by enhancing the capacity of household consumption and improving distribution, through a more active role of the state and social agreements. This report laregely reviews what the Moon administration’s income-led growth has achieved and has not, as of the end of 2019 (due to the data availability). The reader is advised to keep in mind that the administration had been in two and a half years into the 5-year term by the end of 2019, and the growth effect may take a longer time to realize. The main goal of this interim review is to share the rare case of the income-led growth policies with the policy research circles abroad.
    After an introduction in Chapter 1, Chapter 2 applies the approach of Hein and Vogel (2008) to Korea, to have an idea of the growth regime of the Korean economy. An economy is said to be in a wage-led (profit-led, respectively) growth regime if the aggregate demand increases (decreases, respectively) with labor income share. Because the self-employed takes a large share of the labor force in Korea, the chapter uses adjusted measures of labor income share, following Jeon and Joo (2015, 2018). The empirical evidence indicates that the Korean economy is in a wage-led growth regime, at least since the currency crisis in late 1990s. This is largely because consumption is more sensitive than investment or net export to labor income share, and this sensitivity has become stronger after the currency crisis. This finding suggests that the main cause of the post-crisis consumption
slowdown in Korea is the concurrent decline in labor income share. This supports the relevance of the Moon administration's income-led growth strategy, which can be interpreted as an attempt to improve the factor income distribution.
    Chapter 3 outlines the directions and contents of the Moon administration’s income-led growth policies. It introduces the virtuous circle that the income-led growth aims at creating, consisting of increase in decent jobs, increase in the household income, enhancement of the household’s capacity for consumption and economic growth. The chapter introduces a detailed structure of this circle, the three pillars of the income-led growth, namely increasing household income, reducing household expenses and expanding welfare and safety net, and the composition of the detailed policies aimed at achieving each of them. It also points out the shortcomings of the current structure and composition. Moreover, it discusses the relationship between the income-led growth and the two other directions of the Moon administration’s economic policy, namely innovative growth and fair economy.
    Chapter 4 offers a brief interim economic assessment of the income-led growth, focusing on the changes in growth and income inequality between 2017 and 2019. It provides evidences that private consumption stayed solid during the period, while construction and equipment investments fell, and income distribution (especially wage inequality and wage share) improved. Growth rates, however, were disappointing, due partly to the global rise in
protectionism. It argues that fiscal policy was too conservative to properly support the pursuit of income-led growth, leaving more revenue in 2018 than expected, for instance.
    Chapter 5 discusses the minimum wage increases of the Moon administration, which dominated the public’s perception of the income-led growth. The statutory minimum wages were raised, compared to the previous year, by 16.4% for 2018 and 10.9% for 2019. As a result, the hourly minimum wage has risen by 29% from KRW 6,470 in 2017 to KRW 8,350 in 2019. The chapter discusses the socio-economic impacts of the minimum wage raise in the Moon administration. It also reviews the changes of the Moon administration’s policy directions in fairly detail, during which the minimum wage was at the center of the policy debates.
   Chapter 6 offers a brief evaluation of the Moon administration’s social safety net policy in the context of the income-led growth. It reviews how the Korean social insurance and welfare systems, such as the Basic Living Security, Basic Pension and Child Benefit, have been reformed. It assesses the policies related to social services and welfare delivery system. It also discusses the “Mooncare”, the health care policies of the Moon administration.
    Finally, Chapter 7 discusses labor protection in the context of the income-led growth of the Moon administration. It reviews the literature on labor market institutions, trade unions and collective bargaining. It explains the characteristics of the Korean labor market and discusses possible ways to improve the current system of labor protection in Korea. It critically reviews the Moon administration’s labor protection policies and suggests policies that are more consistent with the income-led growth.

1. Introduction 

2. Literature Review

3. Data and Summary Statistics

4. Empirical Analysis 

5. Main Results 
5-1. Wage Trends 
5-2. Asian Developing Countries
5-3. Developed Countries 

6. Conclusion 

References

Low cost of labor has been one of the major incentives that foreign firms invest in many developing countries. Yet, many developing countries including China and ASEAN have recently experienced a rapid increase in labor costs. Using the wage information provided by JETRO, this study examines how Korean FDI outflow is affected by the increase in labor costs of the manufacturing industry in host countries. The results indicate that the worker’s and engineer’s wages in Asian developing countries, who accumulated at least 3 and 5 years of work experience, have generally a negative impact on Korean FDI outflow. However, there exist positive relationships between the wages and FDI when the wages stay at very low levels. We do not find evidence that labor costs make a significant impact on Korean FDI outflow to European or Developed countries.
 

국문요약 

제1장 서론 
1. 연구 배경 
2. 연구 목적, 차별성 및 연구 구성

제2장 중국의 기술 발전 전략 
1. 과학기술 육성 정책 
2. 첨단산업 육성 전략
3. 과학기술 인재 육성 전략 

제3장 중국의 부상과 미ㆍ중 기술격차 분석 
1. 중국의 부상 
2. 미ㆍ중 기술격차 분석 
3. 소결

제4장 미국의 기술 분야 대중국 제재와 중국의 대응 
1. 미국의 기술 분야 대중국 제재 
2. 미국의 제재에 대한 중국의 대응

제5장 결론 및 시사점  
1. 요약 및 평가 
2. 시사점 

참고문헌 

Executive Summary 

   Since March 2018, when President Trump decided to impose additional tariffs on $50 billion worth of Chinese imports, the U.S.-China trade dispute has continued to this day. This study was conducted from the viewpoint that the nature of the U.S.-China conflict is not a tariff war but essentially a technological rivalry, represented by the U.S. Section 301 report and U.S. sanctions against Huawei.
   Recent developments in technologies are changing the concept of national security and that of hegemonic competition. The key feature of technologies in the 4th Industrial Revolution is dual-use. Emerging technologies such as 5G, AI, big data, robotics, aerospace, supercomputers and quantum computer-related technologies can be used for both civilian and military purposes. The more you invest in the development of advanced technologies, the closer you will be to economic and military hegemony. Therefore, it is no wonder that the U.S. harbors great concerns facing the rise of China in these advanced technologies.
   Chapter 2 examines China’s science and technology development policy, high-tech industry development strategy, and national talent development plan. The rise of Chinese science and technology was not achieved overnight. Since the nation’s founding in 1949, China has always been devoted to developing science and technology. Especially after China’s reform and opening, as economic construction became the central task of the country, science and technology have been perceived as “productive power.” The recent Xi Jinping government continues to place emphasis on science and technology, and aims to build China as a world-leading “Innovative Power.” This is also reflected in various statistics.
   Chapter 3 describes the data that support the rise of China. China is now the world’s largest economy in terms of real GDP (USD PPP) and trade volume, and has grown into the world’s second-largest country following the U.S. in terms of military expenditures, R&D expenditures, and international patent applications. In addition, this study constructs a structural estimation model in which each country produces international patents using R&D expenditures and R&D researchers. Empirical results have presented novel findings indicating that China’s innovative productivity has surpassed that of the U.S. since 2015.
   In light of these developments, Chapter 4 discusses at great detail the U.S. sanctions against China. The U.S. views China as not adhering to the principles of market-based trade and investment systems, rather utilizing a form of state-led mercantilism following its accession to the WTO. Based on the perception that China has used illegally and unfairly acquired U.S. technologies to undermine the national security and foreign policy interests of the U.S., the U.S. is strengthening trade and investment sanctions against China. This study, in specific, investigates the backgrounds, contents, and actual applications of the Export Control Reform Act (ECRA), Article 889 of the 2019 National Defense Authority Act, and the Financial Foreign Investment Risk Assessment Modernization Act (FIRRMA). In return, China is responding to the U.S. sanctions with a new “Long March” strategy rather than a tit-for-tat strategy. In other words, China has been setting long-term goals and responding to the U.S. sanctions by improving institutional arrangements, refining industrial policies, and developing its own technologies.
   Chapter 5 diagnoses the impact of the U.S.-China rivalry on the Korean economy by predicting the possible scenarios of the U.S.-China tensions. An international environment without conflict between the U.S. and China is the best for Korea in terms of both national security and economic growth. This is because South Korea has to strengthen cooperation with China based on a solid ROK-U.S. alliance for security and economic development. The more the conflict between the U.S. and China intensifies, the less policy choices and room for profits are left to Korea. However, the conflict between China and the U.S. is expected to be prolonged due to several reasons including China’s unfair practices, bipartisan anti-Chinese sentiment in the U.S., the institutionalization of tensions, and China’s strong response to the U.S. measures.
   In the short run, it seems important for Korea to pay attention to the negative impacts that might occur due to the expansion of U.S. sanctions against China, rather than expecting the benefits that might be brought by the U.S. sanctions to delay China’s technological progress. Recently, there are signs of the U.S. sanctions against China even further expanding the scope to financial sectors. Ironically, increasing pressure from the U.S. is expected to further strengthen China’s R&D capabilities in advanced technology and accelerate its competitiveness in emerging industries. With the onset of the 4th Industrial Revolution, China is rapidly closing the quality gap and technology gap in major industries where Korea has a comparative advantage. If Korea does not adequately respond to changes, it may be difficult to maintain a comparative advantage over China. Thus, now that U.S.-China tensions are intensifying, Korea is facing a pivotal moment in determining the future path of its economy.
   Moreover, the greater the conflict rises between the U.S. and China, the likelihood increases of pressure being applied on Korea to choose between one or the other. However, as the recent China-Japan relations imply, if you have what the other country needs, it is possible to secure strategic autonomy to realize national interests. Facing the 4th Industrial Revolution, “what every country needs” is “technological power.” We must keep in mind that a cooperative partnership with others and respect from other countries can only be guaranteed when Korea maintains global competitiveness in innovation capacity.
 

국문요약 

제1장 서론 
1. 연구의 배경  
2. 선행연구 
3. 본 연구의 차별점 및 연구 방법론과 범위  

제2장 체제전환을 위한 민영화와 극복 과제들 
1. 체제전환국이 직면했던 도전 과제와 북한의 체제전환 시도 
2. 체제전환 국가들의 차이점과 공통점: 점진적 방식과 급진적 방식  

제3장 러시아의 체제이행과 민영화 정책 
1. 러시아의 체제이행 배경 
2. 러시아의 민영화 과정과 특징
3. 러시아의 민영기업 및 기업가 특징과 사례 분석 
4. 러시아 민영화에 대한 평가 

제4장 베트남의 체제이행과 민영화 정책 
1. 베트남의 체제이행 배경 
2. 베트남의 체제이행 과정과 특징
3. 베트남의 민영기업 및 기업가 특징과 사례 분석
4. 베트남 민영화에 대한 평가 

제5장 결론: 북한에 대한 시사점 

참고문헌 

Executive Summary

   Privatization is the first priority of transition economies because it is the most critical process of shifting from a planned economy to a market economy. Even state enterprises can gain competitiveness by attracting foreign capital and adopting foreign technologies. Meanwhile, the most important element of privatization is confirming ownership. For this, it is necessary to go though complex negotiation and mediation between conflicting parties. Otherwise, privatization cannot be completed and the expected effects will not be realized. Based on this understanding, chapter 2 examines the economic plight and challenges faced by the planned economies before the transition process.
   Chapter 3 reviews the major features of Russia’s privatization by period and of Russian businessmen. In addition, success factors and failure factors are presented through an analysis of privatized companies. Against this backdrop, implications for North Korea are drawn, centered on potential issues that could arise during its transition process.
   In chapter 4, Vietnam’s case is analyzed. Vietnam had a different social and economic structure from Russia when it began privatization. Russia was a large autarkic economy with a highly industrialized structure, whereas Vietnam was a small autarkic economy with a low level of industrial development. Thus, privatization in Vietnam proceeded differently as the collective leadership system by the labor party remains intact.
   The first lesson we learn from Russia’s and Vietnam’s experiences is that institutionalization is the prerequisite of privatization. Structural changes of a society and economy can be accomplished only through legislation and institutionalization. Without these crucial developments, investors or capitalists in the market can be discouraged from participating. Another lesson is the importance of forming ardent reformist groups. Such groups can prevent any attempts to reverse progress and return to the past. As seen in Russia’s and Vietnam’s cases, North Korea can implement reforms and transition successfully by quickly developing the private sector and nurturing capitalist businessmen. Establishing a business-friendly climate is a significant factor of success in privatization.
 

Executive Summary 

1. Introduction

2. The Conflict Game with Two Asymmetric Players 
2.1 The Conflict Game with Cheap-Talk Communication 
2.2 Effective Cheap-Talk Communication 
2.3 Ineffective Communication
 
3. Discussion 

References 

We present a version of Baliga and Sjostrom’s (2012a) conflict games with two asymmetric players. The players contemplate whether to take an active engagement action to compel the leader of a neighboring state (an extremist) to give up his risky weapons. We show that a player with greater damage from the extremist is more likely to choose an active engagement action than a player with lesser damage. Furthermore, we examine cheap-talk communication equilibria with the extremist. The likelihood of both players choosing the active engagement action decreases by a hawkish extremist who can send a provocative message, if both players are coordination types. If both players are opportunistic types, a dovish extremist can send an appeasement message that causes one player to be more active while another to be more inactive. Lastly, we show that there does not exist any other communication equilibrium for either kind of extremist, for any other combination of player types.