Taiwan vs SKorean

[Outofin]

Subject would become more exciting when mixed with some sport spirit. So let's comapre Taiwan and South Korean.

Like some forumers already pointed out, SK is more pro-big-business, while Taiwan is more small-mediumn-enterprise-friendly. No doubt they're both very successful economies. But what's the pros and cons?

I copy some hard data from CIA's World Factbook.

South Korean

Population:

48' date='422,644 (July 2005 est.)

GDP (official exchange rate):

$726.5 billion (2005 est.)

[b']Taiwan[/b]

Population:

22,894,384 (July 2005 est.)

GDP (official exchange rate):

$334.4 billion (2005 est.)

I think SK is a more recognizable economy to ordinary people, thanks to their consumer brands like Samsung and Hyundai.

Feel free to open threads like China vs India, and Hong Kong vs Singapore if you're more interested in those subjects.

[anthony_barker]

Couple of points missed

1) Taiwan's economy is now inextricably linked with China

500K Taiwanese live in Shanghai

Most lower end production is moved to China

2) High tech stuff is still kept in Taiwan

Taiwan has been a lot quicker to let guest workers in (Thai/Philippino/Vietnamese) than korea

At TPE often half the people you see are guest workers

In korea they have kept down korean wages and still mostly use local workers

Taiwan has kept the marketing and some of the design and engineering in Taiwan and moved production offshore.

3) Koreans have done a better job creating brands

Taiwanese have done a better job at courting american companies as customers

Name a US brand name electronics device and it is probably is made or is partially made by a Taiwanese company - ipod, dell, compaq etc

4) Taiwan job market has been hit by Chinese competition more fiercely in the past 5 years. I think that as the Chinese labor force has become better educated Taiwanese companies are now more willing to move back office functions to China. This drives down taiwan wages. Taiwan workers in export oriented companies are being pushed more and more.

5) 1997 was really about US denominated debt levels

Korea, Thailand, Ecuador and Argentina had hire debt levels when compared with Taiwan.

[bhchao]

I like to add some additional points:

1) Taiwan and South Korea retain their R&D centers at home, while shifting a large portion of manufacturing operations to mainland China.

2) Taiwanese companies produce lower-priced products, usually the nuts and bolts that make up the final product. Korean companies produce higher-end, pricier products that consumers would buy. This makes marketing and branding more important for Korean companies than their Taiwanese counterparts.

In other words, companies like Samsung introduce products of sleek design and features that appeal to tech-savvy, sophisticated consumers who care more about functionality and convenience than price. ex. refrigerators that offer internet access, surfing the web at high speeds using your cell phone.

Taiwan companies in the LCD market have cut into Korea's market share by offering cheaper priced products.

3) I agree that Taiwanese companies have done a better job courting American companies. Taiwan is probably the chip/semiconductor capital of the world. If a cross-Strait conflict erupted, the business impact on companies like Dell and Hewlett-Packard would be huge.

4) The effects of the 1997 financial crisis felt in Taiwan and South Korea was attributed to the banking system. Taiwan was able to finance its economic growth from 1950-1987 mostly from domestic savings, rather than foreign capital. The high savings rate in Taiwan provided the capital necessary for domestic investment. Many families in Taiwan adopted a savings philosophy, either to finance future entrepreneurial opportunities, or to fund their childrens' future college education.

The high savings rate in Taiwan was compounded by a conservative banking policy of granting loans. The state-owned banks largely ignored the SMEs and prevented them from receiving preferential loans. So no lending crisis occurred in Taiwan due to this policy.

On the other hand, South Korea had a much lower domestic savings rate than Taiwan and had to rely on foreign capital from Japan and the US to finance the growth of the large conglomerates. Unlike Taiwan where a large number of SMEs dominated the economy, these chaebol dominated the economy in Korea and received loans whenever they needed them. Many of these bank loans came from foreign sources. So a lending/banking crisis occurred in Korea in 1997 when the financial crisis spread from Thailand.

[kid-kut]

One thing is, if Samsung falls or if there is a scandal being investigated, economy of Korea falls. As strong as the Korean economy is, people are afraid to spend, and the national economy is unsteady.

[bhchao]

In the wake of South Korean voters' concern over the economy, Taiwan's UDN published today this comparison between Taiwan and South Korea's economies: http://udn.com/NEWS/WORLD/WORS2/4146132.shtml

[anthony_barker]

Taiwan has not allowed their currency to appreciate against the USD as much as korea. This explains away a lot of the discrepancy that the newspaper is reporting.

I think Taiwan has kept the USD within the tight band for political reasons - keep US government happy and more export competitiveness vs china.

PPP GDP levels are still higher than korea - and income is more fairly distributed according to gini measures.

http://www.taiwan.com.au/Polieco/Trade/Economy/2006/0406.html

Thus the average taiwanese still has more spending power than the average korean...

Cheers

A

[Outofin]

It becomes increasingly obvious that Taiwanese companies should fight their way to consumer market and build up their own brands. They rely on other companies’ orders too much. These companies, such as Nokia, Motorola, IBM, Apple, tend to “create” competition among their suppliers. Competition between mainland and Taiwanese companies sometimes got very personal, like between Lenovo and Acer, between BYD and FoxCon.

Secondly, Taiwan should more willing to integrate with the mainland, though I know it’s unlikely because of political consideration. Chinese companies have been allowed to buy Korean business. It can’t happen in Taiwan.

[bhchao]

Korea also has direct flights with China, an advantage Taiwan has avoided for political reasons. Instead Hong Kong benefits as the middleman between Taiwan and the mainland.

If the Three Links are approved, Taiwan and Fujian province would both benefit from the reduction in supply chain delays. Taiwan will also benefit from mainland tourism if Three Links are approved.

Taiwan should diversify its economy to shift towards less labor-intensive industries. Otherwise it won't be able to compete with its neighbors because of the Mainland's low cost advantage. Acceleration towards a more service-oriented economy, such as in financial services or liberalizing the banking sector, could make Taiwan more competitive.

Another benefit of Three Links is that exports between China and the US will use Taiwan as the intermediary, instead of always relying on Hong Kong as a passage point.

[simonlaing]

It seems both countries have had issues with its leadership embroiled in Scandals.

I am not sure how tied Taiwan companies are to the government of Taiwan like the Massive Chaebols are to Korea.

Both countries send students to the US have have cultural influence from there. Taiwan seems to have more Japanese influence from the 70s and 80s. Whereas Korea still somewhat holds Japan in Contempt for WW2 sex slavery issues and failing to change the textbooks.

If the bell weather of success is how can your country use the Mainland China to it's best advantage Taiwan may have an edge. The language and cultural issues are less strong and they are given special priveleges by the government specifically from being from Taiwan. Here in Nanjing there are lots of Koreans but though there are some LG plants here many plan on going back to Korea.

Kunshan is a Taiwan suburb of Shanghai, Suzhou almost is one too.

Is Acer's PC power enough to measure up to Korea's Hyundai or Samsung. I think Taiwans population and GDP are just smaller so this is the reason for less brand names rather than other reasons.

have fun,

SimoN:)

[Outofin]

Revisiting the topic 3 years after.

If we re-examine the 2 nations’ (oh damn it, Taiwan is not a nation in any term. -_- ) achievements, Taiwan is falling behind.

I’ve seen the best Korean athletes competing in Beijing Olympics. 13 gold medals for Koreans, 0 for Taiwanese. And Kim Yu-Na was the most beautiful woman in the Winter Olympics.

In the IT industry, Samsung has replaced Sony in recent years, while Taiwanese companies are only best at exploiting cheap labors in the mainland. Foxconn might be the most successful company, but the only thing consumers know about it is that its employees keep jumping off buildings.

In term of military prowess, Taiwan is not in the same class of South Korea either.

Now tell me what Taiwan has done these years and why it couldn’t do better. (Is it a nation at all? Now the question doesn’t sound like a joke any more.) No, I'm not laughing at Taiwan. I'm worried, because Taiwan's economic and cultural weakness might well be China's weakness too.

[skylee]

Isn't Asus quite succesful? I think it is a Taiwan brand, no?

PS - why must everyone try to be number one? there is only one number one. why can't we just live comfortably, with freedom and democracy and the choice not to take up military service?

[xiaocai]

@ skylee: agreed. I believe that happiness is not always determined by how many medals you win in the Olympics, how many big companies you own and how strong your military force is.

[bhchao]

Image has become an obsession in South Korean society. The need to appear successful seems to motivate work/lifestyle decisions in South Korea, far more so than Taiwan. Success is defined by working for big, stable companies, especially among Korean men, and looking good compared to your peers.

Many people in South Korea think that the better you look appearance-wise, the more likely you can land a high paying job. Hence people resort to ways to make themselves look better, including plastic surgery.

That may explain why South Korea has the highest suicide rates, even higher than Japan's, because success there is defined by status and materialistic factors. An Ivy League education in the US is highly prized in South Korea, far more than in Taiwan.

[aristotle1990]

Outofin, what are you talking about? Are you trying to say that South Korea has been more successful than Taiwan recently? I think the fact that Taiwan's GDP per capita was 61.18% larger than South Korea's in 2008 refutes that pretty well. (Admittedly, using the latest data the gap is smaller, but by all counts Taiwan's economy is, on a per capita basis, unquestionably more valuable.) Throw in the international prominence of Taiwan's movies (what good South Korean movies have you seen lately?) and the fact that it provides mainland China with nearly all of its good music, and I'm pretty sure that Taiwan has not been doing too badly.

And speaking of happiness, the previous posters are correct: Taiwan beats South Korea on two different international happiness rankings (here and here) by a wide margin. Beats South Korea on the Happy Planet Index too.

[skylee]

what good South Korean movies have you seen lately

I go to cinemas every weekend. But to be very honest I have not seen a lot of korean movies lately (it has to do with personal taste shift). And I have not seen a lot of Taiwan films either (IIRC the last one was 海角七號 which I found too 媚日 to my taste). But I do think that South Korea produces good films. Are Taiwan films "prominent" internationally? More "prominent" than Korean films? I must confess that I don't have this imprssion. I can of course search the awards each got. But my impression is that both are doing well.

[aristotle1990]

No, you're right. The thing is, of course there are good Korean movies, but think about the number that have become household names worldwide. (Zero.) Now think about the number of Taiwanese films that have. Admittedly, there's only one (Crouching Tiger Hidden Dragon), but that's one more than South Korea has. Also has one more director of international prominence than South Korea does: Ang Lee. And Jay Chou is in a lot of movies! (I know, not a fair comparison, but there is a lot of Taiwanese talent used by Hollywood/Hong Kong/mainland China.)

[skylee]

household names ... my house might be a bit different from yours.

Korean directors that I keep an eye on include - Park Chan-wook 朴贊郁, who directed "Old Boy" which I maintain is a superb (though sick) film, and "JSA" (this one is really quite famous, no?); and Kwak Jae-yong 郭在容, who has directed many unbelievably romantic films; and Kim Ki-duk 金基德, who has made many award-winning and unsettling films.

And Taiwanese directors ... of course there are Hou Hsiao-hsien and Ang Lee.

[aristotle1990]

By "household names" I mean names that the average Westerner has heard of. (Which of course implies that the average Asian has heard of them too.) This means films like Hero, Crouching Tiger Hidden Dragon, and House of Flying Daggers. I am sure JSA is a good movie, but I have never heard of it.

Though in music, to be quite honest I've got to hand it to South Korea: songs like this and this are enough to make me want to learn Korean. China/Taiwan has nothing like this stuff.

[gato]

http://www.washingtonpost.com/wp-dyn/content/article/2010/04/17/AR2010041702781.html

In prosperous South Korea, a troubling increase in suicide rate

By Blaine Harden

Washington Post Foreign Service

Sunday, April 18, 2010

And so it ends for 35 South Koreans a day. The suicide rate in this prosperous nation of about 50 million people has doubled in the past decade and is now the highest in the industrialized world.

The rate of suicide in most other wealthy countries peaked in the early 1980s, but the toll in South Korea continues to climb. Twenty-six people per 100,000 committed suicide in 2008 (the most recent year for which data are available). That's 2 1/2 times the rate in the United States and significantly higher than in nearby Japan, where suicide is deeply embedded in the culture.

[Outofin]

Taiwan hasn't been done too badly at all. But, Korean industries and companies have been climbing up technology ladder and value chain much faster than Taiwan. Korean economy is on its way to become the next Japan (in a smaller size). Where is Taiwan going to be in 5 years? Where do they want to be?

It's relevant because, what enables Korea doing this? Is Chinese economy following Japan and Korea's steps or Taiwan's? Is Chinese economy going to be a larger Japan/Korea, or a larger Taiwan or richer India? If we don't change, we will be stuck competing at low level.