Much is being made of the fact that China’s economy will very soon exceed the Japanese economy, and become the world’s second biggest economy. This is an impressive achievement, even though China’s GDP per capita is only one-tenth that of Japan, and its population ten times greater. The size of GDP weighs heavily for strategic power, and fast growth provides new markets. Bytheway, China’s exports have just overtaken Germany, and China is now also the world’s biggest exporter.
But Korea is also rapidly catching up on Japan.
It’s only a few decades ago that Korea was poorer than most African countries. But like Japan before it, Korea launched a fast track economic development strategy, founded on industry, technology and education. And based on some indicators, Korea is rapidly catching up and even streaking ahead of Japan.
Korea’s life expectancy, at 79.4 years, is slightly above the OECD average, and not far behind Japan’s 82.6. And Korea’s GDP per capita (adjusted for purchasing power parity) is already $25,600 compared with Japan’s $34,100. And until the global financial crisis struck, Korea’s economic growth rate (5.6 per cent) over the previous decade was the second highest in the OECD club, just behind Ireland, and way ahead of Japan’s 2.0 per cent. The Japanese economy is also weighed down by public debt of 200 per cent of GDP, while Korea’s is only around 30 per cent.
It is in the world of innovation that Korea really shines. Like Japan, it is near the top of the OECD league table for R&D expenditure, with 3 1/2 % of GDP. But Korea has a much higher share than Japan of business R&D expenditure going on high-tech industries, whereas Japan still spends a lot on medium-tech industries. Korea’s high tech advantage also shows up in its exports. Korea’s broadband penetration is near the top of the world at 33 per cent, while Japan’s is lingering at 24 per cent.
For education performance, Korea is also doing much better. Based on the OECD’s Program for International Student Assessment, Korean 15 year old students were very much stronger than Japanese for reading and mathematical literacy, and only just behind for scientific literacy. Not surprising, Korea spends a much higher share of its GDP on education.
Korea is also developing a more globalized elite. According to the TIELF scores, Koreans speak much better English than do the Japanese (the Chinese and Mongolians also beat the Japanese on this count). Korea has a much higher number of students studying abroad than does Japan, despite a population just one-third the size.
And in responding to the global economic crisis, the Korean government has been the smartest on the planet, with most of its fiscal stimulus focused on green growth.
North East Asian debates often focus too much on the big 2 of China and Japan -- even though it has been estimated that in the coming decades, a reunified Korea could catchup with Japan in terms of size of total GDP.
So don't forget Korea!
To make sure that we don't forget Korea, "The Land of the Morning Calm" was the leading Asian medal winner in the Winter Olympics recently held in Vancouver, Canada. Korea won 6 gold, 6 silver and 2 bronze medals, while China only won 5 gold and Japan did not even win any gold medals (a source of national embarassment which Hatoyama's government is now seeking to address). Most notably, Korea's KIM Yu-na won the women's figure skating gold medal, pushing Japan's Mao Asada, her longtime rival, into a distant second place.
Japan/Korean rivalry may come to a head this year, which happens to be the 100th anniversary of Japan's annexation of Korea. Japanese Foreign Minister Okada's recent visit to Seoul was a positive move where he apologised for the pain caused to the Korean people. But there is still no immediate prospect of Japanese permanent residents of Korean origin being given the right to vote. And moreover, there are still way too many right wing Japanese who do not believe that there was anything wrong with Japan's 35 year rule of Korea.
Who could play a role in bringing Japan and Korea more closely together? The Japanese Emperor, of course. He has even openly recognised that he has Korean ancestry!
OECD in Figures 2009 – www.oecd.org
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