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16302. Chinaʹs Startup Ecosystem Policy and Implications
- Author:
- Sangbaek Hyun, Hyojin Lee, Yunmi Oh, and Koun Cho
- Publication Date:
- 07-2020
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- The Chinese government is moving toward a qualitative growth model in the era of “New Normal,” transitioning from the existing quantitative growth model. In line with the transition, since 2015 the Chinese government has been implementing a strategy of “mass entrepreneurship and innovation,” which involves building a startup ecosystem in order to solve youth unemployment and create new growth engines. Thanks to the success story of China’s BAT (Baidu, Alibaba, Tencent) and these new policies by the Chinese government, the startup entrepreneurship boom in China has grown rapidly, together with an explosive expansion of infrastructure and platforms for startups. To determine whether China’s economy can be transformed into an innovative economy, we need to carefully examine and evaluate China’s strategy and status of developing the startup ecosystem.
- Topic:
- Entrepreneurship, Economic Growth, Unemployment, and Startup
- Political Geography:
- China and Asia
16303. The Networking Strategy of Contemporary Chinese Diplomacy
- Author:
- Jai Chul Heo
- Publication Date:
- 07-2020
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- China is actively building Network Power in economic and traditional security and non-traditional security areas, while in some cases maximizing its own interests by using the Network Power already formed. In particular, China is building Collective Power at a rapid pace in significant areas. China also actively participated in existing networks and established Positional Power by preoccupying important positions. However, China’s Network Power still seems to have a long way to go in terms of Programming Power to build new systems, unlike Collective or Positional Power. What is notable in the process of analyzing China’s Network Power is that competition between the U.S. and China is fierce over Network Power.
- Topic:
- Security, Diplomacy, Economics, and Power Politics
- Political Geography:
- China, Asia, and United States of America
16304. Approaches to Labor Demand Forecast in Developing Economies and Their Implications for Korea's ODA
- Author:
- Young Ho Park, Yejin Kim, and Minji Jeong
- Publication Date:
- 08-2020
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- This study aims to develop systematic labor forecast methods, thereby contributing to increasing the efficiency of TVET ODA. This study suggests a new labor demand forecast methodology that combines quantitative and qualitative analyses and applies it to Vietnam, estimating labor demand by occupations in the country’s wireless communication equipment industry. This methodology starts with a statistical projection of Vietnam’s future labor market and industry. Subsequently, this study uses an enterprise survey and stakeholder interviews to complement missing information, as Vietnam's statistical system, like that of many other emerging economies, lacks some detailed data. Currently, the “element occupations” group takes the largest portion in the labor demand by industry and occupation. According to our results, however, the “plant and machine operators and assemblers” group is expected to gradually increase, thus becoming the largest occupation group in the wireless communication equipment industry in the near future. Given the various circumstances surrounding the labor market in developing countries, other alternatives in addition to our hybrid method of combining quantitative and qualitative analysis can also produce well-founded labor force projections. This study suggests analytical methodologies using global value chain (GVC) and big data as innovative alternatives, which can complement the shortcomings of traditional evaluation methods. ODA implementing agencies would benefit from paying attention to the labor forecasting methods presented in this research, and devising policies supporting these methods in order to properly apply them in reality.
- Topic:
- Communications, Labor Issues, and Economy
- Political Geography:
- Asia, Vietnam, and Korea
16305. Integrating Climate Change into Development Cooperation – Korea's Experience
- Author:
- Jione Jung and Jihei Song
- Publication Date:
- 08-2020
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- Korea has reached milestones in development cooperation over the past two decades. At the same time, it has sought for various measures to better incorporate climate consideration in its cooperation activities. However, a number of challenges remain and further action is required in improving the system and practices to better integrate climate change into Korea’s development cooperation. We aim at providing an overview of Korea’s progress in integrating climate change into its development cooperation to share the experiences and to highlight some achievements. In doing so, we first review how other developed countries have promoted climate change integration. Through comparison with Germany, the United States, and Switzerland, we summarized several achievements made by Korea in the area of development cooperation. In addition, we identified areas for further improvement to better integrate climate change into development cooperation, as well as projections for the next phase of Korea’s development cooperation to begin in 2021.
- Topic:
- Climate Change, Development, and International Cooperation
- Political Geography:
- Asia and Korea
16306. Foreign Aid to Fragile States: How Effective Does It Work?
- Author:
- Yul Kwon, Jisun Jeong, Yoon Sun Hur, Jihei Song, Aila Yoo, and Mi Lim Kim
- Publication Date:
- 09-2020
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- Korea has put much effort into providing aid for fragile states in efficient and effective ways. As a part of such efforts, Korea established the Fragile States Assistance Strategy in 2017. However, there is still room for improvement in terms of the effectiveness of Korea’s Official Development Assistance (ODA) implementation under fragile and conflict-affected situations. Accordingly, the study aims to suggest policy suggestions for Korea’s development cooperation in fragile states by comparing and analyzing the current status, policies, and characteristics of aid to fragile states in major donor countries, including Germany, Australia, Denmark, and Japan. In addition, we review Korea’s case and draw following policy implications to tackle the remaining challenges. First, it is requisite for Korea to consolidate the whole-of-government approach and reciprocal coordination mechanisms to support for fragile states for overcoming fundamental causes of fragilites. Second, Korea should choose proper types of aid and sectoral aid allocation suitable for overcoming vulnerabilities and development challenges efficiently and effectively in fragile and conflict-affected states. Lastly, the Korean government should conduct a fragility analysis and manage projects systematically.
- Topic:
- Development, Foreign Aid, Fragile States, and Donors
- Political Geography:
- Asia and Korea
16307. The Way Forward for WTO Reform: Agricultural Subsidies and Special and Differential Treatments
- Author:
- Jin Kyo Suh, Ji Hyun Park, and Min-Sung Kim
- Publication Date:
- 10-2020
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- The multilateral trading system has been in crisis. The world economy has changed significantly since the WTO replaced the previous GATT system and new challenges are quickly piling on top of the old ones. The rising emerging countries and the relative decline of traditional economic members, together with the need to deal with complex new issues such as climate change and e-commerce and digital trade, are shaking the foundations on which the WTO was built some 25 years ago. There is also growing momentum among many WTO members to ‘modernize’ the WTO, including the Appellate Body although the details and feasibility of reform are unclear at this stage. In this perspective, we suggest some ideas on both trade-distorting farm subsidies and S&DT which are the two important issues in the WTO negotiations.
- Topic:
- Agriculture, Reform, Economy, Multilateralism, WTO, and Subsidies
- Political Geography:
- Global Focus
16308. How Chinese Local Governments are Expanding Foreign Economic Cooperation
- Author:
- Sanghun Lee, Hongwon Kim, Joohye Kim, Jiwon Choi, and Jaehee Choi
- Publication Date:
- 10-2020
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- As the Chinese economy becomes more advanced and the internal and external economic environment surrounding China changes, so too does China’s strategy for external openness and economic cooperation. Accordingly, specific policies are diversifying from the past focus on manufacturing and foreign direct investment to services, overseas investment, bilateral and multilateral FTAs, and bilateral investment treaties (BITs). As the central government’s policy stance changes, China’s local governments are also promoting external openness and cooperation based on regional development stages, industrial structure, and regional development policies, reflecting the central government’s strategy. In particular, after the 19th Party Congress, the central government showed a strategic stance expanding external openness. In response, local governments have moved away from the traditional method of cooperation in the manufacturing sector centered on industrial complexes, and in recent years various cooperative methods have been promoted, including regional economic integration, service and investment, the use of FTAs, and innovations in institutions to expand external openness. Along with the shift in China’s foreign economic strategy, the economic cooperation environment surrounding Korea and China is changing as well, including the strengthening of protectionism, structural changes in the Chinese economy, the Korea-China FTA coming into effect, and the launch of follow-up negotiations. Therefore Korea needs to find new strategies and measures for economic cooperation with China, making it time to find new ways to expand cooperation with China’s central and local governments. Against this backdrop, this study aims to analyze the strategies, detailed policies and major cases of China’s central and local governments’ external openness and economic cooperation, and to draw policy implications for strengthening economic cooperation between Korea and China in the future.
- Topic:
- Government, Foreign Direct Investment, Economy, and Economic Cooperation
- Political Geography:
- China and Asia
16309. Determinants of FDI in Transition Economies and Implications for North Korea
- Author:
- Cheol-won Lee, Hyung-gon Jeong, and Min-suk Park
- Publication Date:
- 11-2020
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- North Korean authorities have been seeking changes in North Korea’s economic policy since the Kim Jong Un regime took power. Along with decentralization, the government is trying to increase efficiency and productivity within the socialist economic system, and as part of this policy it has designated 27 economic development zones to attract foreign investment. Foreign direct investment plays a crucial role in economic growth for low-income countries such as North Korea, which lacks capital and technology. This study discusses North Korea's foreign investment policy and tasks ahead of its government to revitalize the economy, based on the premise that nuclear negotiations between North Korea and the US proceed smoothly. First of all, in order to derive policy tasks, we compared and analyzed the achievements and policies of transition countries in Asia and Eastern Europe in terms of attracting FDI, also analyzing the determinants of FDI inflows, after which we present policy tasks for North Korean authorities. As South Korea may very well become the largest investor in North Korea, our study also discusses tasks for the Korean government to pursue in order for Korean companies to successfully invest in North Korea.
- Topic:
- Foreign Direct Investment, Economy, and Transition
- Political Geography:
- Asia and North Korea
16310. U.S.-China Technological Rivalry and Its Implications for Korea
- Author:
- Wonho Yeon
- Publication Date:
- 11-2020
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- Recent developments in advanced technology are changing the concept 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. To estimate and compare the innovation productivity of the U.S. and that of China, 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 innovation productivity has surpassed that of the U.S. since 2015. At the same time we can observe that the U.S. has the world’s largest intellectual property surplus and keeps expanding it, while China’s intellectual property deficit has been growing every year. Given the two contradictory facts - China’s high innovation productivity and low intellectual property balance - we can conclude that China is strong at “innovation” but weak at “invention.” Knowing this, the U.S. eventually began to target this vulnerability. This is the U.S.’ Tech-Decoupling strategy. To achieve U.S.-China tech decoupling, the U.S. has been strengthening trade and investment sanctions against China. In specific, the U.S. has been utilizing the Export Control Reform Act (ECRA), Section 889 of the 2019 National Defense Authority Act, and the Foreign Investment Risk Review Modernization Act (FIRRMA). In return, China is responding to the U.S. sanctions with the new “Long March” strategy rather than a tit-for-tat strategy. In other words, China has been setting long-term aims and responding to the U.S. sanctions by improving institutional arrangements, refining industrial policies, and developing its own technologies such as “Dual-circulation strategy” and “New Infrastructure Plan.” 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.
- Topic:
- Science and Technology, Sanctions, Investment, Innovation, Trade, and Strategic Competition
- Political Geography:
- China, Asia, North America, Korea, and United States of America