Why the U.S. Should Invest In South Korea

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<p class=”Default” style=”line-height:200%”><b>Introduction</b></p>
<p style=”line-height:200%”>The South Korean stock market inflated this year in spite of the corporate fracas and the current drama experienced in the political field. The workers at the South Hyundai Motor went to strike and led to a decline in profit from a third quarter profit to a seven year low. Then there was the Massive recall by Samsung on its Galaxy Note 7 which could set them $5 billion back. The Hanjin Shipping of South Korea also went into bankruptcy withholding goods worth $14 billion at the port. To add to this, the country put up a nuclear test and a distasteful political scandal maimed the presidency, however, South Korea still stands as a high investment country.</p>
<p style=”text-indent:.5in;line-height:200%”>The Korean market has two major problems that worry investors; the domestic debt problem which cut on its domestic consumption and the ever more aging society which is one of the fastest growing in the world and the first in the Asian continent. These two notwithstanding, the country has major strong points that enable its government to make a higher number of policy choices for the economy and the different markets.</p>
<p style=”line-height:200%”><b>South Korea&rsquo;s Fiscal Strength</b></p>
<p style=”line-height:200%”>All the three major credit rating agencies which are Moody, Fitch, and S&amp;P brought South Korea to its highest rating ever since the first rating of the country in 1986. In the ranking table, South Korea comes below the US and the UK but above Japan among the developed countries worldwide. Additionally, S. Korea has one of the lowest sovereign debts level of 34.5% GDP and this is among the lowest among the developed nations. This is something of comfort in a world where nations are printing money for economic growth. Plus, the S Korean government had extra in their budget for 9 out of the last ten years.</p>
<p style=”line-height:200%”><b>Increasing South Korean brand power</b></p>
<p style=”line-height:200%”>The South Korean Market is branded with some of the most famous companies in the world today. The Samsung Company, the LG electronics and the Hyundai cars are just but to mention a few. The Korean Culture like its food and music is also beginning to find popularity from within the rest of the world.</p>
<p style=”line-height:200%”><b>Price Discount History</b></p>
<p style=”line-height:200%”>When preferred shares made its debut into the world market they were sold for small discounts to their relevant common shares. As time went by, this price has fluctuated drastically and it now stands close to its all time high. However, the preferred Korean Shares are among the few worldwide asset classes to recover after its fall in the year 2008 global Financial Crisis. 1997 was the year The Korean preferred shares traded at a wide price discount after the IMF&rsquo;s rescue. For investors who had had the chance or luck to have purchased this shares in 1997 will have been now tripled their investments and this has increased the investment opportunity in South Korea.</p>
<p style=”line-height:200%”><b>Education</b></p>
<p style=”line-height:200%”>The Korean educational system is made similar to the United States&rsquo; educational system. Six years elementary school, three years of middle school all of which are free and compulsory to every child. Then one proceeds to three years high school education. South Korea has one of the highest literacy rates in the world standing at a whole 98 percent. Most of the refugee students in the Korean nation go to foreign schools. The country boasts of 45 native schools 18 of which are American or Briton school. Its Capital city, Seoul, which is the hub of investments, has the most number of foreign schools.</p>
<p style=”text-indent:.5in;line-height:200%”>The main language used at these schools is English. This encourages foreign investors who take camp in these Korean cities and assures them that in case their families live with them, the education of their children is not messed up. A plus factor is that children to foreign employees in Korea who have with them valid passports do not need special requirements to gain admission into the schools.</p>
<p style=”line-height:200%”><b>Skilled Labor and Technology</b></p>
<p style=”line-height:200%”>The Korean nation lacks sufficient natural recourses for its activities but this is sufficiently helped by the availability of skilled labor. Education is the key provider of skills and Korea boasts of quality education available in the country. The Korean&rsquo;s are also education enthusiasts making the country&rsquo;s literacy level be at 98% as I had discussed earlier. The lowest educational level reached by almost all the entrants into the manufacturing areas is often a high school degree. And then again, Korea is a country with one of the biggest university enrollment globally. This is a strong factor that shows off the great profile of the Korean industry to the rest of the world. Any investor looking to work in the Korean market is assured of skilled labor in this country.</p>
<p style=”line-height:200%”><b>Market</b></p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>Korea is ranked 13 worldwide on the world&rsquo;s economy chart and an exceptional trading partner ranked as the world&rsquo;s 9th largest exporter .Its high-tech industry and the complex customer market offers a very eye-catching market for businesses in the whole world to penetrate or expand into the Asian market. Another factor that makes Korea an attractive market is the strong purchasing power in the country.<b> </b></p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>The Korea<b>-</b>US trade agreement is the largest agreement in its history. This agreement will bring about a significant impact in the market environment of Korea. The FTA will lead to a solid protection of the rights of intellectual property, great transparency in contracting and procurement processes, solid trade facilitation, and easier accessibility to the market. The more Korea continues to move closer to technology industries; it will create more opportunities to international companies. These companies will enjoy greater competiveness and high technological development.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>&nbsp;</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”><b>The Small Government</b>&nbsp;</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>In the year 2009, the country&rsquo;s public spending was only 27% of the GDP. This by far is the lowest among the &lsquo;affluent&rsquo; economies of the OECD.&nbsp; Its an annual trend that enables South Korea to keep a leash on its government&rsquo;s borrowing. It therefore creates a stable government that encourages investors since no fear of mismanagement that could in turn ruin their investments.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”><b>Chinese Ties </b></p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>China has a very attractive economy that mirrors on South Korea due to their close association. The increase in the Chinese currency also increases its flexibility and this also eases the Yuan&rsquo;s peg to the US dollar. This consecutively puts the South Korean goods on a competitive international ground and thus boosts the demand for export. This affects an investor positively because the goods from their investments find international market.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>World&rsquo;s Number One Innovator</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>South Korea is dwelling more on research and development as part of GDP than other advanced countries. The Organization of Economic Co-operation and Development Recently Released a data that showed that in 2014, South Korea had spent 4.29% of its GDP on research and development. The next state that followed South Korea in such expenditure was Isreal&nbsp; at 4.111%, and finally Japan which spent 3.58%. the Bloomberg Innovation Index of 2016 ranked South Korea as the country that has the world&rsquo;s most innovative economy. Bloomberg Innovation Index evaluated states according to six various categories which were: Research and Development, HI-TECH companies, research team, education, patents, and manufacturing. In all these evolutions, South Korea took the lead in the whole world as the states that manufacture products that are value added and for tertiary efficiency. Tertiary efficiency is a measure that involves the concentration of science and engineering and the enrollment in higher education.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”><b>Conclusion</b></p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>South Korea has experienced transformation after the war that took place in Korea. It has developed from a tiny, poor agriculture company to a highly urbanized technology economy with highly trained employees. South Korea is the third improved country in the whole world after US and UK and countries are now running to invest there. Their innovative and technological experiences make it the King of innovation in the whole world. South Korea is leading in Innovation in the whole world and it mainly focuses on value added products. Raw materials have also become readily available in South Korea because states are now running to invest there. All these factors and the well trained and cheap labor makes it possible for the US to invest in South Korea.</p>

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