Korea and Japan Coming Together

...Michael Berger contributes frequently to The New Leader from Japan...

...Regardless of the past, you cannot escape the present reality," says Samsung Economic Research's Lim...

...I wish we could be more independent of Japanese influence, but for the time being there is no alternative...

...The receivers, perched on apartment balconies in Seoul and other cities, have proliferated even though there is an informal government ban against watching satellite-transmitted shows...

...Samsung, for instance, is the only color television manufacturer in Korea capable of producing its own large-size picture tubes...

...But the advanced technology used in its components, as well as in many of the machine tools Korean firms need to improve their production efficiency, gives Japan an advantage no amount of government regulation or trade negotiation can eliminate...

...What's the harm in watching Japanese TV...

...Import restrictions bar Japan's finished automobiles and electronic goods from markets here...

...The common view is that it is the younger people who are attracted to the Japanese...

...I speak the language, I understand their way of doing business, which in basic respects is similar to ours," says 62-year-old Sun-Hong Park, a trading company executive...

...asks a Seoul office worker...

...Under a quid pro quo arrangement, a Korean broker will also be permitted to set up a branch in Japan...

...Of late, the "visitor pattern" has broadened appreciably...

...Perhaps more telling is the fact that nearly one-quarter of all foreign tourists visiting Japan in 1991 were South Koreans, the largest single group...

...The last time we went there, we had guns...

...Soonhoon Bae, "because their price is competitive and their quality is still superior...

...Of the 1,858 foreign offices established as of last December, the Japanese had the most, with 587...

...Korean translations of Japanese comic books have also become popular...

...Moreover, Japan's direct investment in South Korea last year ran to $226 million, the largest single share, albeit a slight decline from the 1990 figure...

...If I give Samsung any leverage over my supply of a key component," he comments, "it could be dangerous...

...Last year, 1.46 million Japanese visited South Korea, making it second only to the United States as a favorite overseas destination...

...And an increasing number of Japanese are reciprocating the attention...

...Every new market provides an opportunity, and the latest, in the words of one executive, is "the last frontier in Asia—Vietnam...

...This time, it will be peaceful, and profitable...

...It was the Vietnam War," says Han-Bong Suh, the Director of Hanshin Securities Company...

...Some people criticize the bars as one more example of what they consider a Japanese cultural invasion...

...Many older Koreans, who suffered directly as a result of the long occupation of their nation, are nevertheless more confident interacting with the Japanese...

...Last year, Japan accounted for $8.7 billion of South Korea's total trade deficit of $9.7 billion, or roughly 90 per cent...

...They ignore the fact that without technology transfers from Japanese companies, we wouldn't be where we are today...

...Most executives and economic planners concede the importance of Japan's role in Korea's economy...

...the United States was second with 564...

...The mass media in both countries always overemphasize Korea-Japan friction...

...What's wrong with that...

...Asked about the relationship with Japan, Koreans often respond by speaking of a generation gap...

...At the same time, Koreans speak of the necessity to keep pace with, if not surpass, the Japanese...

...To help close the trade gap, the government is trying to negotiate a technology-sharing agreement with Japan that would spur development of joint products to the benefit of both sides...

...We need each other, in different ways...

...Adopting the language of a weather forecaster, he predicts "partly cloudy or even sunny skies" over most of South Korea's major international markets...

...Indeed, to those looking at relations between the two countries solely through the skewed perspective of trade figures, the Japanese still appear to be dominating...

...The chief reason for the imbalance is not Japanese import barriers...

...I watch sports programs, and my kids watch cartoons...

...You can't just look at trade numbers," notes Dong-Sung Lim, president of the Samsung Economic Research Institute...

...It is, rather, the very structure of Korea-Japan trade, and that can be described in one word: dependency...

...We have lagged behind the Japanese in entering Southeast Asian markets," observes the Trade Ministry's Director General, "but Vietnam is our chance to catch up...

...So have satellite dishes used to pick up programs broadcast by Japan's national public television network, NHK...

...Bae's choice is clear...

...The problem of dependency is particularly acute in electronics...

...Although some Korean firms have managed to reduce their use of Japanese components, bottom-line factors like product quality and market share continue to thrust the two old rivals into expanding business relationships...

...For their part, Korean officials have been especially wary of Japanese power in the financial sector, and have limited the commercial activities of its banks and securities houses here...

...It's fun...

...But the Koreans who have made these clubs the fastest growing niche in the economy's service sector could not care less...

...Three Japanese securities houses—Daiwa, Yamaichi and Nikko-already have liaison offices in Seoul, but they amount to merely a fraction of the total Japanese business presence in South Korea...

...Japan's influence is apparent everywhere...

...Kia Motor Company's oldest foreign partner is Mazda Motor Company of Japan, while Daewoo Motors has broken off its alliance with General Motors and strengthened its technology and marketing agreements with Japan's Suzuki Motor Company, a specialist in mini vehicles...

...On the subject of Japan, however, his outlook changes...

...Yet in another sign of what local observers see as an inevitable deepening of Korea-Japan economic links, the Ministry of Finance announced not long ago that a Japanese securities firm, thus far unnamed, will be allowed for the first time to open a full branch office in Seoul...

...The vast majority of Japanese who travel to Korea now are genuine tourists, plus teenagers from middle- and high-school sports teams invited to play their Korean counterparts...

...We buy most of our VCR heads from Sony," explains company president Dr...

...So in a way, they are helping our competitive position...

...I could buy heads from Samsung [South Korea's leading component maker], but they're an even bigger competitor than Sony in my home market...

...makers...

...Their association has developed to the point where the two now use interchangeable parts on a number of models...

...Predictably, the response of Japanese business leaders has been cool...

...The sectors driving Korean exports-automobiles and electronics—rely on Japanese suppliers for a significant percentage of the parts that go into completed products...

...Curiously, the enthusiastic reaction of many Koreans to Japanese pop culture does not seem to be inhibited by memories of Japan's harsh, 35-year occupation of the peninsula...

...Actually, the situation is more complex...

...Sokan Chang, Director General of the Ministry of Trade and Industry's Bureau of International Trade Promotion, is optimistic that his nation can recover some of its export competitiveness...

...we all have a good time," says a young office clerk...

...Hyundai Motor Company, Korea's leading automaker, has long-term strategic ties with Japan's Mitsubishi Motor Company...

...Despite a spate of recent stories recounting how thousands of Korean women were forced into prostitution by Japan's government and military authorities during World War II, people here continue to enjoy the fare of their neighbor to the east...

...We must deal with them.' Other veteran Korean businesspeople are equally pragmatic...

...Furthermore, a recent government five-year economic plan predicts that Korea's shortfall with Japan will swell to over $9 billion annually...

...Gloomy," he says, "gloomy all the way...

...The others have to buy them, and, says Young H. Kim, general manager of overseas operations for Goldstar Electronics, "Japanese companies supply us with picture tubes at a lower cost than U.S...

...That includes sing-along karaoke bars, where Koreans, like young Japanese, love to spend an evening clrinking and serenading one another to the recorded sounds of a full orchestra, accompanied by a videotape showing scenes appropriate to the songs selected...

...In past years, titillating stories appeared about Japanese men whose attraction to Korea was the nightlife activities in its bars and brothels...

...Only about 10 per cent of their parts come from Japan, yet that includes the most expensive item in each unit, the recording and playback head...

...South Korean electronics and light industry manufacturers, despite pressure to support the economic boycott instituted by the U.S., have been undertaking joint ventures in Vietnam with the hope that lower labor costs will boost their exports...

...Daewoo Electronics' videocassette recorders, for example, are 85 per cent Made in Korea...