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Doing Business in South Korea

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Doing Business With. South Korea. by Sheryll. South Korea. Formal name: Republic of Korea ... Seoul City. South Korea. Thank you. Hope you learned something! ... – PowerPoint PPT presentation

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Title: Doing Business in South Korea


1
Doing Business in South Korea
2
South Korea
3
Background
  • Known as the Hermit Kingdom
  • 35 year period of Japanese rule
  • June 1950 The North Korean army invaded and the
    Korean War began
  • Ended in the DMZ at the 38th parallel

4
Economy
  • Today, GDP per capita is 7 times that of India
    and 13 times that of North Korea
  • Moved to a market-oriented model after the
    financial crisis of 1997-1999
  • Exchange rate (as of 10/29/03)

  • 1179.00 KRW 1 US

5
Economy
  • Export Partners
  • US 21.8
  • Japan 11.9
  • China 10.7
  • Hong Kong 6.2
  • Taiwan 4.7
  • Import Partners
  • Japan 19.8
  • US 18.2
  • China 8
  • Saudi Arabia 6
  • Australia 3.7

6
Economy
  • Major Industries
  • Electronics, automobile production, chemicals,
    shipbuilding, steel, textiles, clothing,
    footwear, food processing
  • Labor force by occupation
  • 69 Services and other
  • 21.5 Mining and Manufacturing
  • 9.5 Agriculture, Fishing, and Forestry
  • Unemployment
  • 3.9, as of 2001

7
General Information
  • Population 48.324 million people (2002)
  • Religion 49 Christianity
  • 47 Buddhism
  • 3 Confucianists
  • 1 Shamanism and Chongdogyo
  • Internet Users 22.23 million (2001)

8
General Information
  • Capital Seoul
  • Climate Cold, dry winters (average of 21 F)
    Hot, humid summers (average of 77 F)
  • Terrain 70 of the country is mountainous, with
    cultivated plains along the coast.
  • Airports with paved runways 68
  • Airports with unpaved runways 34

9
Economic Environment
  • Slowdown in 2003

10
Economic Environment
  • Real GDP - .4 in Q1 2003
  • Private consumption - 2.1 Q1 2003
  • Consumer confidence index lowest since 1998 when
    initiated
  • BOKs Business Survey Index lowest in 27 months

11
Economic Environment
  • Manufacturing shrank 2.2 in May
  • Wage growth is slowing but still high 8.2 April
    2003
  • For many foreign companies wages are biggest
    negative KITA survey.
  • Drop in FDI to 9.1 billion lowest since crisis.

12
Economic Environment
  • Unemployment is low and steady at 3.3 in Q2
    2003.
  • Exports strong up 23 in Sept.
  • Interest rates low 3.75 in July
  • Inflation is low 3.5
  • Government stimulus package

13
Economic Forecast
  • GDP
  • 2.4 for 2003
  • 4.4 for 2004
  • Growth in Exports
  • Slow to 9.3 in 2003 from 15 in 2002

14
Economic Forecast
  • Inflation
  • 3.5 in 2003
  • 2.2 in 2004
  • Source EIU Country Reports

15
Leading sectors for U.S. Exports
  • Franchising
  • Defense Equipment
  • Electrical Power Systems
  • Software
  • Architectural Engineering Services
  • Cosmetics
  • Medical Equipment
  • Pharmaceuticals
  • Pollution Control Equipment
  • Source U.S. Commercial Service

16
For More Info
  • EIU Country Reports
  • Korea Country Commercial Guide 2004 U.S.
    Commercial Service
  • Ministry of Commerce, Industry and Energy
    Website

17
Political Environment
  • President Roh Moo-hyun
  • Until Sept., of the Millennium Democratic Party
    (MDP) founded by predecessor Kim Dae-jung
  • Serves 2003 2008
  • Pledged to continue reforms after crisis

18
Political Environment
  • President Roh seen as inept
  • Close associate and head of party involved in
    embezzlement scandal
  • Money for Peace
  • 10 approval rating

19
Political Environment
  • Parliament is controlled by the Grand National
    Party (GNP)
  • Traditionally aligned with chaebols
  • Parliamentary election April 2004

20
Political Environment
  • Roh forming a new party
  • GNP may maintain control
  • More political turmoil than usual
  • Lack of consensus
  • Slowdown in reforms

21
Political Environment
  • Reforms include
  • Chaebols
  • Privatizing Banks
  • Bankruptcy laws OECD estimates 25 of Korean
    companies cannot pay their debt interest.

22
ExternalPolitical Environment

23
ExternalPolitical Environment
24
ExternalPolitical Environment

25
ExternalPolitical Environment

26
For More Info
  • EIU Country Reports
  • EIU Country Monitor
  • Korea Country Commercial Guide 2004

27
Legal Issues
  • Korea Chamber of Commerce Industry Database
  • Corporate
  • Trade
  • FDI
  • Finance
  • Intellectual Property
  • Tax
  • Labor


28
Legal Issues
  • Intellectual Property Law Korea Intellectual
    Property Office (KIPO)
  • Antitrust Law Korea Fair Trade Commission
  • Tax Law National Tax Service
  • Import/Export Korea Customs Service
  • Background Country Commercial Guide U.S.
    Commercial Service


29
Cultural Differences
  • Gestures
  • Remove shoes when entering a Koreans home or a
    temple
  • Women should cover their mouths when they laugh,
    men do not
  • Eating in the street is rude
  • Blowing your nose in public is rude
  • Dont put your hands in your pockets when talking

30
Cultural Difference
  • Gestures cont.
  • Money
  • Counting money
  • Counting on your fingers
  • Slurp soup and smack lips while enjoying a meal

31
Cultural Opposites
  • Emergency phone number is 119
  • Meals are served all at once to the group, not in
    courses to an individual
  • Traditional footwear has left and right socks,
    with shoes that can fit either foot
  • Addressing envelopes

32
Cultural Concepts
  • Group harmony
  • Saving face
  • Relationships
  • Oriental zodiac
  • Language

33
Living in Korea
  • Pyong equals 6 square feet
  • Chonsay rent system
  • Hotels
  • Deluxe
  • Tourist
  • Yogwans

34
Transportation
  • Weaving is a way of life
  • Beeping is not a sign of anger
  • Taxis
  • Standard
  • Deluxe
  • Picking up additional passengers

35
Business Etiquette
  • Third party introduction is needed to get an
    appointment with a new business
  • Always carry business cards and give them out
    immediately upon being introduced
  • Use titles rather than first names
  • Business-related entertainment is very important

36
Business Etiquette
  • Punctuality
  • Be on time
  • Do not take it personally if someone shows up
    late
  • Remember he got here as fast as he could
  • Koreans do not rush

37
Business Etiquette
  • Leadership and status
  • Age
  • Gender
  • Titles
  • Education

38
Business Etiquette
  • Meetings
  • Address a mixed group as Gentlemen and Ladies
  • Presentations
  • Socializing
  • Nodding the head yes

39
Business Etiquette
  • Negotiating
  • No concept of fair play or of not taking
    advantage of a weaker adversary
  • Conflicts must be resolved so that neither side
    appears to have been forced to make a
    concession
  • Its up to you to ask the right questions and
    read between the lines
  • Like to haggle
  • Patient

40
Business Etiquette
  • Contracts
  • Koreans like for them to be flexible
  • May sign with a tojang instead of a signature

41
Business Organizations
  • Chaebol
  • Business conglomerates
  • AMCHAM
  • American Chamber of Commerce in Korea
  • KCCI
  • Korean Chamber of Commerce and Idustry
  • KABI
  • Korean-American Business Institute
  • KOEX
  • Korea Exhibition Center

42
Useful Sayings
  • Good morning
  • Ahn nyong, ha ship nee ka (ah-nee-yong
    hah-sim-NEE-kah)
  • My name is
  • Nah eui, eeh room eun, ____ eep nee da
    (NAH-oo-wee-eerum-oon ____ eem-NEE-da
  • Thank you
  • Kahm sah hap nee da (kumh-sah ham-NEE-dah)
  • Yes Neh (nay)
  • No Ah nym nee da (ah-nyim-NEE-dah)

43
Hangul Alphabet
Saccone 1994
44
Questions?
45
Sources for Cultural Information
  • Kenna, Peggy, and Sondra Lacy. Business Korea A
    practical guide to understanding South Korean
    business culture. Lincolnwood, Il Passport
    Books, 1995.
  • Saccone, Richard. The Business of Korean
    Culture. Elizabeth, NJ Hollym, 1994.
  • Asia Pulse. South Korea. 3 November 2003http//www2.gol.com/users/coynerhm/south_korea_eti
    quette.htm .
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