Introduction
China and Korea are countries both in the Asia continent. The economies of both these countries have drastically changed in the past two decades. In the 1960s to the late 1990s, Korea is said to have had the fastest growing economy in the world. However, this changed in the year 2000 when the country’s economy took a downfall. China’s economy has been more successful than most of the Asian economies. The country’s economy is the world’s largest growing economy and second after that of USA. This has, therefore, made China one the major contributors of growth in Asia. China has become one of the outflows of Korean investment. Quite a great number of the Korea students are found in China. This proves that China educational system is of high quality and also of international standards. It goes without saying that the China economy has expanded due, to the fact that most of these students secure jobs in the country thereby providing the best quality of human resource that the country requires.
China is believed to be one of the best Asian economies surpassing countries in Asian like Korea which were considered as the best newly industrializing economies two decades ago. China has become one of the greatest threats for Korea companies. A good example of these companies is the export industries. China’s products have become of international recognition with most of the developing countries especially in Africa opting to go for China’s products (Epstein, 85). A good example of this is the infrastructure sector where we see developing countries inviting China’s companies for tenders to construct roads, residential houses. This has drastically contributed to the growth of China’s economy thereby undermining the export basis of the Korean companies which were considered the best in the world a few years ago. The China’s government has been on the fore front of encouraging investment in the country by laying down policies that encourage investors. The country’s economy is known to have come up from a combination of improved resource allocation and new model of economic growth.
China has seen the evolution of production companies which have transferred from Korea. Some of these companies are export related who consider China as a better export platform. When Korean economy came to a downfall in the late 1990s the country considered China as one of their major market to their products. This helped boost the economy of China due to the availability of essential products such as chemicals. China economy has also been considered as a threat by the neighboring countries like Korea whereby, these countries industries are said to be soaking thereby raising prices of essential resources such as petroleum, steel, cement and other construction infrastructure related materials. It has also been evident that some Korean investment companies are shifting to China. A good example of this is a footwear factory that decided to switch its operation from near Shanghai to Vietnam. This has automatically favored China’s economy by creating jobs and improving on its exports hence raising revenue.
Although there seem to be some differences between the two economies growth, it’s clear that the two countries maintain good business relations. The two countries are major contributors to the world economy due to their high production of manufacturing merchandise. The two governments have maintained close ties in the manufacturing and export sectors by laying down policies that encourage trade between them. A good example of this is the Free Trade Agreement which saw the two countries’ economic relations rapidly improve. As China’s economy continues to grow and impact the world economy in general, it is obvious that the economic relationship between the two countries will further be strengthened. In particular, most of the Korea’s investment based in China which concentrates on manufacturing sector will widen to nonmanufacturing sectors, this will automatically favor the two countries economic development (Galbraith, 102).
Two decades ago, the Korea economy was where the China’s economy is today. Korea economy was considered as the best growing economy in the world. However, this tremendously changed in the late 1990s when the country had its economic in turmoil. China being the world’s second largest economy and world’s largest exporter and second largest importer after USA makes one of the G20 major economies. On the other hand, Korea has a market economy which ranks 15th in the world also making it a part of the G20 major economies. South Korea economy is known to be one of the fastest growing economies in the developing countries.
Conclusion
Both China and Korea are major contributors to the world economy. Good will from both countries’ government and implementation of good laid down trade agreements would see Korea rise to its previous Gross Domestic Product (GDP) of the years 1960 to the late 1990. Good interaction between business people from both countries in the manufacturing and non-manufacturing sectors would help the human resource shift to both countries hence benefitting the two countries equally. By the establishment of official diplomatic ties e.g. the one signed in August 1992 economic exchange between the two countries will rapidly increase.
Work cited
Galbraith, James K. Inequality and Instability: A Study of the World Economy Just Before the Great Crisis. New York, N.Y: Oxford University Press, 2012. Print.
Epstein, Gerald A. Financialization and the World Economy. Northampton, Mass: Edward Elgar Publishing, 2005. Print.
