The economy of South Korea is a
highly developed mixed economy
A mixed economy is variously defined as an economic system blending elements of a market economy with elements of a planned economy, markets with state interventionism, or private enterprise with public enterprise. Common to all mixed economi ...
. By nominal GDP, it has the
5th largest economy in Asia and the
13th largest in the world.
South Korea
South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korea, Korean Peninsula and sharing a Korean Demilitarized Zone, land border with North Korea. Its western border is formed ...
is notable for its rapid economic development from an underdeveloped nation to a
developed,
high-income
A high-income economy is defined by the World Bank as a nation with a gross national income per capita of US$12,696 or more in 2020, calculated using the Atlas method. While the term "high-income" is often used interchangeably with " First World" ...
country in a few generations. This economic growth has been described as the
Miracle on the Han River
The Miracle on the Han River refers to the period of rapid economic growth in South Korea, following the Korean War (1950–1953), during which South Korea transformed from a least developed country to a developed country. The rapid reconstru ...
, which has allowed it to join
OECD
The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate e ...
and the
G-20
The G20 or Group of Twenty is an intergovernmental forum comprising 19 countries and the European Union (EU). It works to address major issues related to the global economy, such as international financial stability, climate change mitigation, ...
. South Korea still remains one of the fastest growing developed countries in the world, following the
Great Recession
The Great Recession was a period of marked general decline, i.e. a recession, observed in national economies globally that occurred from late 2007 into 2009. The scale and timing of the recession varied from country to country (see map). At ...
. It is included in the group of
Next Eleven
Terence James O'Neill, Baron O'Neill of Gatley (born 17 March 1957) is a British economist best known for coining BRICs, the acronym that stands for Brazil, Russia, India, and China—the four once rapidly developing countries that were thought ...
countries as having the potential to play a dominant role in the global economy by the middle of the 21st century.
South Korea's
education system
The educational system generally refers to the structure of all institutions and the opportunities for obtaining education within a country. It includes all pre-school institutions, starting from family education, and/or early childhood education ...
and the establishment of a motivated and educated populace is largely responsible for spurring the country's high technology boom and economic development. South Korea began to adapt an export-oriented economic strategy to fuel its economy. In 2019, South Korea was the
eighth largest exporter and
eighth largest importer in the world. The
Bank of Korea
The Bank of Korea (BOK; ) is the central bank of the Republic of Korea and issuer of Korean Republic won. It was established on 12 June 1950 in Seoul, South Korea.
The bank's primary purpose is price stability. For that, the bank targets in ...
and the
Korea Development Institute
The Korea Development Institute (KDI) is a Korean government agency established in 1971 to conduct policy research. KDI has conducted research on a broad range of economic and social issues, including macroeconomics policy, fiscal policy, and lab ...
periodically release major
economic indicators
An economic indicator is a statistic about an economic activity. Economic indicators allow analysis of economic performance and predictions of future performance. One application of economic indicators is the study of business cycles. Economic in ...
and economic trends of the economy of South Korea.
Renowned financial organizations, such as the
International Monetary Fund
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster globa ...
, notes the resilience of the South Korean economy against various economic crises. They cite the country's economic advantages as reasons for this resilience, including low state debt, and high fiscal reserves that can quickly be mobilized to address any expected financial emergencies. Other financial organizations, like the
World Bank
The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...
, describe Korea as one of the fastest-growing major economies of the next generation, along with
BRIC
BRIC is a grouping acronym referring to the developing countries of Brazil, Russia, India, and China, which are identified as rising economic powers. It is typically rendered as "the BRIC," "the BRIC countries," "the BRIC economies," or alte ...
and Indonesia. South Korea was one of the few developed countries that was able to avoid a
recession
In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various ...
during the
Great Recession
The Great Recession was a period of marked general decline, i.e. a recession, observed in national economies globally that occurred from late 2007 into 2009. The scale and timing of the recession varied from country to country (see map). At ...
. Its economic growth rate reached 6.2% in 2010, a recovery from economic growth rates of 2.3% in 2008 and 0.2% in 2009, during the
Great Recession
The Great Recession was a period of marked general decline, i.e. a recession, observed in national economies globally that occurred from late 2007 into 2009. The scale and timing of the recession varied from country to country (see map). At ...
. The South Korean economy again recovered with the record-surplus of US$70.7 billion mark of the current account in the end of 2013, up 47 percent growth from 2012. This growth contrasted with the uncertainties of the global economic turmoil, with the country's major economic output being the technology products exports.
Despite the South Korean economy's high growth and structural stability, South Korea experiences damages to its credit rating in the stock market due to
North Korea
North Korea, officially the Democratic People's Republic of Korea (DPRK), is a country in East Asia. It constitutes the northern half of the Korea, Korean Peninsula and shares borders with China and Russia to the north, at the Yalu River, Y ...
in times of
military crises. The recurring conflict affects the financial markets of its economy.
History
Overview
Following the
Korean War
, date = {{Ubl, 25 June 1950 – 27 July 1953 (''de facto'')({{Age in years, months, weeks and days, month1=6, day1=25, year1=1950, month2=7, day2=27, year2=1953), 25 June 1950 – present (''de jure'')({{Age in years, months, weeks a ...
, South Korea remained a country with less developed markets for a little more than a decade. The growth of the industrial sector was the principal stimulus to South Korea's economic development. In 1986, manufacturing industries accounted for approximately 30 percent of the gross domestic product (GDP) and 25 percent of the work force. Due to strong domestic encouragement and some foreign aid, Seoul's industrialists introduced modern technologies into outmoded or newly built facilities, increased the production of commodities—especially those for sale in foreign markets—and plowed the proceeds back into further industrial expansion. As a result, industry altered South Korea's landscape, drawing millions of labourers to urban manufacturing centres.
A downturn in the South Korean economy in 1989 spurred by a decrease in exports and foreign orders caused concern in the industrial sector. Ministry of Trade and Industry analysts stated that decreased export performance resulted from structural problems, including an overly strong won, increased wages and labor costs, frequent strikes, and higher interest rates. The result was an increase in inventories and cutbacks in production at a number of electronics, automobile, and textile manufacturers, as well as at the smaller firms that supplied the parts. Factory automation systems were introduced to reduce dependence on labour, to boost productivity with a smaller work force, and to improve competitiveness.
Rapid growth from 1960s to 1980s
![TwoKoreasGDPPerCapita](https://upload.wikimedia.org/wikipedia/commons/0/02/TwoKoreasGDPPerCapita.svg)
With the coup of General
Park Chung-hee
Park Chung-hee (, ; 14 November 1917 – 26 October 1979) was a South Korean politician and army general who served as the dictator of South Korea from 1961 until his assassination in 1979; ruling as an unelected military strongman from 1961 ...
in 1961, which at first caused political instability and an economic crisis, a
protectionist
Protectionism, sometimes referred to as trade protectionism, is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulations. ...
economic policy began, pushing a bourgeoisie that developed in the shadow of the State to reactivate the internal market. To promote development, a policy of
export-oriented industrialization
Export-oriented industrialization (EOI) sometimes called export substitution industrialization (ESI), export led industrialization (ELI) or export-led growth is a trade and economic policy aiming to speed up the industrialization process of a ...
was applied, closing the entry into the country of all kinds of foreign products, except raw materials. Agrarian reforms were carried out and General Park nationalized the financial system to swell the powerful state arm, whose intervention in the economy was through five-year plans.
The spearhead was the chaebols, those diversified family conglomerates such as
Hyundai Hyundai is a South Korean industrial conglomerate ("chaebol"), which was restructured into the following groups:
* Hyundai Group, parts of the former conglomerate which have not been divested
** Hyundai Mobis, Korean car parts company
** Hyundai ...
,
Samsung
The Samsung Group (or simply Samsung) ( ko, 삼성 ) is a South Korean multinational manufacturing conglomerate headquartered in Samsung Town, Seoul, South Korea. It comprises numerous affiliated businesses, most of them united under the ...
and
LG Corporation
LG Corporation (or LG Group) (), formerly Lucky-Goldstar from 1983 to 1995 (Korean: ''Leokki Geumseong''; ), is a South Korean multinational conglomerate founded by Koo In-hwoi and managed by successive generations of his family. It is ...
, which received state incentives such as tax breaks, legality for their exploitation system and cheap or free financing: the state bank facilitated the planning of concentrated loans by item according to each five-year plan, and by economic group selected to lead it.
South Korea received donations from the United States due to the Cold War, and foreign economic and military support continued for some years. Chaebols started to dominate the domestic economy and, eventually, began to become internationally competitive. Under chaebols, workers began to see their wages and working conditions improve, which increased domestic consumption. By the 1980s, the country rose from low income to middle income.
South Korea's real GDP expanded by an average of more than 8 percent per year,
[ from US$2.7 billion in 1962 to US$230 billion in 1989, breaking the trillion dollar mark in the early 2000s. Nominal GDP per capita grew from $103.88 in 1962 to $5,438.24 in 1989, reaching the $20,000 milestone in 2006. The manufacturing sector grew from 14.3 percent of the ]GNP
The gross national income (GNI), previously known as gross national product (GNP), is the total domestic and foreign output claimed by residents of a country, consisting of gross domestic product (GDP), plus factor incomes earned by foreign ...
in 1962 to 30.3 percent in 1987. Commodity trade volume rose from US$480 million in 1962 to a projected US$127.9 billion in 1990. The ratio of domestic savings to GNP grew from 3.3 percent in 1962 to 35.8 percent in 1989.[ In the early 1960s, South Korea's rate of growth exceeded North Korea's rate of growth in most industrial areas. ]
The most significant factor in rapid industrialization was the adoption of an outward-looking strategy in the early 1960s.[ This strategy was particularly well-suited to that time because of South Korea's low savings rate and small domestic market. The strategy promoted economic growth through labor-intensive manufactured exports, in which South Korea could develop a competitive advantage. Government initiatives played an important role in this process.][ Through the model of export-led industrialization, the South Korean government incentivized corporations to develop new technology and upgrade productive efficiency to compete the global market.] By adhering to state regulations and demands, firms were awarded subsidization and investment support to develop their export markets in the evolving international arena. In addition, the inflow of foreign capital was encouraged to supplement the shortage of domestic savings. These efforts enabled South Korea to achieve growth in exports and subsequent increases in income.[
By emphasizing the industrial sector, Seoul's export-oriented development strategy left the rural sector barely touched. The steel and shipbuilding industries in particular played key roles in developing South Korea's economy during this time. Except for mining, most industries were located in the urban areas of the northwest and southeast. Heavy industries were located in the south of the country. Factories in Seoul contributed over 25 percent of all manufacturing value-added in 1978; taken together with factories in surrounding Gyeonggi Province, factories in the Seoul area produced 46 percent of all manufacturing that year. Factories in Seoul and Gyeonggi Province employed 48 percent of the nation's 2.1 million factory workers. Increased income disparity between the industrial and agricultural sectors became a problem by the 1970s despite government efforts to raise farm income and improve rural areas ][
]
In the early 1980s, in order to control inflation, a conservative monetary policy
Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often a ...
and tight fiscal measures were adopted. Growth of the money supply
In macroeconomics, the money supply (or money stock) refers to the total volume of currency held by the public at a particular point in time. There are several ways to define "money", but standard measures usually include Circulation (curren ...
was reduced from the 30 percent level of the 1970s to 15 percent. During this time, Seoul froze its budget for a short while. Government intervention in the economy was greatly reduced and policies on imports and foreign investment were liberalized to promote competition. To reduce the imbalance between rural and urban sectors, Seoul expanded investments in public projects, such as roads and communications facilities, while further promoting farm mechanization
Mechanization is the process of changing from working largely or exclusively by hand or with animals to doing that work with machinery. In an early engineering text a machine is defined as follows:
In some fields, mechanization includes the ...
.[
The measures implemented early in the decade, coupled with significant improvements in the world economy, helped the South Korea regain its lost momentum. South Korea achieved an average of 9.2 percent real growth between 1982 and 1987 and 12.5 percent between 1986 and 1988. The double-digit inflation of the 1970s was brought under control. Wholesale price inflation averaged 2.1 percent per year from 1980 through 1988; consumer prices increased by an average of 4.7 percent annually. Seoul achieved its first significant surplus in its balance of payments in 1986 and recorded a US$7.7 billion and a US$11.4 billion surplus in 1987 and 1988 respectively. This development permitted South Korea to begin reducing its level of ]foreign debt
A country's gross external debt (or foreign debt) is the liabilities that are owed to nonresidents by residents. The debtors can be governments, corporations or citizens. External debt may be denominated in domestic or foreign currency. It incl ...
. The trade surplus for 1989, however, was only US$4.6 billion, and a small negative balance was projected for 1990.
1990s and the Asian Financial Crisis
For the first half of the 1990s, the South Korean economy continued a stable and strong growth in both private consumption and GDP. During the 1997 Asian financial crisis
The Asian financial crisis was a period of financial crisis that gripped much of East Asia and Southeast Asia beginning in July 1997 and raised fears of a worldwide economic meltdown due to financial contagion. However, the recovery in 1998–1 ...
, after several other Asian currencies were attacked by speculators, the Korean won started to depreciate in October 1997. The problem was exacerbated due to non-performing loans at many of Korea's merchant banks. By December 1997, the IMF had approved a US$21 billion loan, that would be part of a US$58.4 billion bailout plan. By January 1998, the government had shut down a third of Korea's merchant banks. Throughout 1998, Korea's economy would continue to shrink quarterly at an average rate of −6.65%. and South Korean chaebol Daewoo was dismantled by the government in 1999 due to debt problems. American company General Motors
The General Motors Company (GM) is an American Multinational corporation, multinational Automotive industry, automotive manufacturing company headquartered in Detroit, Michigan, United States. It is the largest automaker in the United States and ...
managed to purchase the motors division. Indian conglomerate Tata Group
The Tata Group () is an Indian multinational conglomerate headquartered in Mumbai. Established in 1868, it is India's largest conglomerate, with products and services in over 150 countries, and operations in 100 countries across six continent ...
, purchased the trucks and heavy vehicles division of Daewoo.
Actions by the South Korean government and debt swaps by international lenders contained the country's financial problems. Much of South Korea's recovery from the 1997 Asian financial crisis
The Asian financial crisis was a period of financial crisis that gripped much of East Asia and Southeast Asia beginning in July 1997 and raised fears of a worldwide economic meltdown due to financial contagion. However, the recovery in 1998–1 ...
can be attributed to labor adjustments (i.e. a dynamic and productive labor market with flexible wage rates) and alternative funding sources. By the first quarter of 1999, GDP growth had risen to 5.4%, and strong growth thereafter combined with deflationary pressure on the currency led to a yearly growth of 10.5%. In December 1999, president Kim Dae-jung
Kim Dae-jung (; ; 6 January 192418 August 2009), was a South Korea, South Korean politician and activist who served as the eighth president of South Korea from 1998 to 2003.
He was a 2000 Nobel Peace Prize recipient for his work for democra ...
declared the currency crisis over.
2000s
Korea's economy moved away from the centrally planned, government-directed investment model toward a more market-oriented one. These economic reforms, pushed by President Kim Dae-jung
Kim Dae-jung (; ; 6 January 192418 August 2009), was a South Korea, South Korean politician and activist who served as the eighth president of South Korea from 1998 to 2003.
He was a 2000 Nobel Peace Prize recipient for his work for democra ...
, helped Korea maintain one of Asia's few expanding economies , with growth rates of 10.8% in 1999 and 9.2% in 2000. Growth fell back to 3.3% in 2001 because of the slowing global economy, decreased exports, and perceptions that corporate and financial reforms have stalled.
After the bounce back from the 1997 Asian financial crisis
The Asian financial crisis was a period of financial crisis that gripped much of East Asia and Southeast Asia beginning in July 1997 and raised fears of a worldwide economic meltdown due to financial contagion. However, the recovery in 1998–1 ...
, the economy continued strong growth in 2000 with a GDP growth of 9.08%. However, the South Korean economy was affected by the September 11 Attacks
The September 11 attacks, commonly known as 9/11, were four coordinated suicide terrorist attacks carried out by al-Qaeda against the United States on Tuesday, September 11, 2001. That morning, nineteen terrorists hijacked four commercia ...
. The slowing global economy, falling exports, and the perception that corporate and financial reforms had stalled caused growth to decrease to 3.8% in 2001 Thanks to industrialization GDP per hour worked (labor output) more than tripled from US$2.80 in 1963 to US$10.00 in 1989. More recently the economy stabilized and maintain a growth rate between 4–5% from 2003 onwards.
Led by industry and construction, growth in 2002 was 5.8%, despite anemic global growth. The restructuring of Korean conglomerates (''chaebol
A chaebol (, ; ) is a large industrial South Korean conglomerate run and controlled by an individual or family. A chaebol often consists of multiple diversified affiliates, controlled by a person or group whose power over the group often exc ...
s''), bank privatization, and the creation of a more liberalized economy—with a mechanism for bankrupt firms to exit the market—remain an unfinished reform task. Growth slows down in 2003, but production expanded 5% in 2006, due to popular demand for key export products such as HDTV
High-definition television (HD or HDTV) describes a television system which provides a substantially higher image resolution than the previous generation of technologies. The term has been used since 1936; in more recent times, it refers to the g ...
s and mobile phones.
Like most industrialized economies, South Korea experienced setbacks during the Great Recession
The Great Recession was a period of marked general decline, i.e. a recession, observed in national economies globally that occurred from late 2007 into 2009. The scale and timing of the recession varied from country to country (see map). At ...
. Growth fell by 3.4% in the fourth quarter of 2008 from the previous quarter, the first negative quarterly growth in 10 years, with year on year quarterly growth continuing to be negative into 2009. Many sectors of the economy at the time reported declines, with manufacturing dropping 25.6% as of January 2009, and consumer goods sales dropping 3.1%. Exports in autos and semiconductors, two pillars of the economy, shrank 55.9% and 46.9% respectively, while exports overall fell by a record 33.8% in January, and 18.3% in February 2009 year on year. As in the 1997 Asian financial crisis
The Asian financial crisis was a period of financial crisis that gripped much of East Asia and Southeast Asia beginning in July 1997 and raised fears of a worldwide economic meltdown due to financial contagion. However, the recovery in 1998–1 ...
, Korean currency also experienced massive fluctuations, declining by 34% against the US dollar.[ Annual growth in the economy slowed to 2.3% in 2008, and was expected to drop to as low as −4.5% by ]Goldman Sachs
Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...
, but South Korea was able to limit the downturn to a standstill at 0.2% in 2009. Despite the Great Recession
The Great Recession was a period of marked general decline, i.e. a recession, observed in national economies globally that occurred from late 2007 into 2009. The scale and timing of the recession varied from country to country (see map). At ...
, the South Korean economy, helped by timely stimulus measures and strong domestic consumption of products that compensated for decreased exports, was able to avoid a recession unlike most industrialized economies, posting positive economic growth for two consecutive years of the crisis. In 2010, South Korea made an economic rebound with a growth rate of 6.1%, signaling a return of the economy to pre-crisis levels. South Korea's export has recorded $424 billion in the first eleven months of the year 2010, already higher than its export in the whole year of 2008. The South Korean economy of the 21st century, as a Next Eleven
Terence James O'Neill, Baron O'Neill of Gatley (born 17 March 1957) is a British economist best known for coining BRICs, the acronym that stands for Brazil, Russia, India, and China—the four once rapidly developing countries that were thought ...
economy, is expected to grow from 3.9% to 4.2% annually between 2011 and 2030, similar to growth rates of developing countries such as Brazil or Russia.
The South Korean government signed the Korea-Australia Free Trade Agreement (KAFTA) on 5 December 2013, with the Australian government seeking to benefit its industries—including automotive, services, and resources and energy—and position itself alongside competitors, such as the US and ASEAN. South Korea is Australia's third largest export market and fourth largest trading partner with a 2012 trade value of A$32 billion. The agreement contains an Investor State Dispute Settlement (ISDS) clause that permits legal action from South Korean corporations against the Australian government if their trade rights are infringed upon.
The government cut the work week
The weekdays and weekend are the complementary parts of the week devoted to labour and rest, respectively. The legal weekdays (British English), or workweek (American English), is the part of the seven-day week devoted to working. In most of th ...
from six days to five in phases, from 2004 to 2011, depending on the size of the firm. The number of public holidays was expanded to 16 by 2013.
South Korean economy decreased in the first quarter of 2019, which happened to be its worst drop since the Great Recession
The Great Recession was a period of marked general decline, i.e. a recession, observed in national economies globally that occurred from late 2007 into 2009. The scale and timing of the recession varied from country to country (see map). At ...
. GDP declined a seasonally adjusted 0.3 percent from the previous quarter.
South Korea’s prices rose more than 6 percent in July compared with last year, the fastest jump in nearly a quarter century.
In July 2022, South Korea’s Consumer Price Index
A consumer price index (CPI) is a price index, the price of a weighted average market basket of consumer goods and services purchased by households. Changes in measured CPI track changes in prices over time.
Overview
A CPI is a statistica ...
rose 6.3 percent, the highest rate since November 1998.
High-tech industries in the 1990s and 2000s
In 1990, South Korean manufacturers planned a shift in future production plans toward high-technology industries. In June 1989, panels of government officials, scholars, and business leaders held planning sessions on the production of such goods as new materials, mechatronics—including industrial robotics—bioengineering, microelectronics, fine chemistry, and aerospace. This shift in emphasis, however, did not mean an immediate decline in heavy industries such as automobile and ship production, which had dominated the economy in the 1980s.
South Korea relies upon exports to fuel the growth of its economy, with finished products such as electronics, textiles, ships, automobiles, and steel being some of its most important exports. Although the import market has liberalized in recent years, the agricultural market has remained protectionist
Protectionism, sometimes referred to as trade protectionism, is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulations. ...
due to disparities in the price of domestic agricultural products such as rice with the international market. As of 2005, the price of rice in South Korea was four times that of the average price of rice on the international market, and it was believed that opening the agricultural market would affect South Korean agricultural sector negatively. In late 2004, however, an agreement was reached with the WTO
The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade. With effective cooperation
in the United Nations System, governments use the organization to establish, revise, and e ...
in which South Korean rice imports will gradually increase from 4% to 8% of consumption by 2014. In addition, up to 30% of imported rice will be made available directly to consumers by 2010, where previously imported rice was only used for processed foods. Following 2014, the South Korean rice market will be fully opened.
South Korea today is known as a Launchpad of a mature mobile market, where developers thrive in a market where few technology constraints exist. There is a growing trend of inventions of new types of media or apps, using the 4G and 5G internet infrastructure in South Korea. South Korea has today the infrastructures to meet a density of population and culture that has the capability to create strong local particularity.
Data
The following table shows the main economic indicators in 1980–2021 (with IMF staff stimtates in 2022–2027). Inflation below 5% is in green.
Sectors
Shipbuilding
During the 1970s and 1980s, South Korea became a leading producer of ships, including oil supertankers, and oil-drilling platforms. The country's major shipbuilder was Hyundai, which built a 1-million-ton capacity drydock at Ulsan in the mid-1970s. Daewoo joined the shipbuilding industry in 1980 and finished a 1.2-million-ton facility at Okpo on Geoje Island, south of Busan, in mid-1981. The industry declined in the mid-1980s because of the oil glut and because of a worldwide recession. There was a sharp decrease in new orders in the late 1980s; new orders for 1988 totaled 3 million gross tons valued at US$1.9 billion, decreases from the previous year of 17.8 percent and 4.4 percent, respectively. These declines were caused by labor unrest, Seoul's unwillingness to provide financial assistance, and Tokyo's new low-interest export financing in support of Japanese shipbuilders. However, the South Korean shipping industry was expected to expand in the early 1990s because older ships in world fleets needed replacing. South Korea eventually became the world's dominant shipbuilder with a 50.6% share of the global shipbuilding market as of 2008. Notable Korean shipbuilders are Hyundai Heavy Industries
Hyundai Heavy Industries Co., Ltd. (HHI; ) is the world's largest shipbuilding company and a major heavy equipment manufacturer. Its headquarters are in Ulsan, South Korea.
History
HHI was founded in 1972 by Chung Ju-yung as a division of the ...
, Samsung Heavy Industries
Samsung Heavy Industries Co., Ltd. (Korean: 삼성중공업) is one of the largest shipbuilders in the world and one of the "Big Three" shipbuilders of South Korea (including Hyundai and Daewoo). Geoje (in Gyeongsangnam-do) is one of the largest ...
, Daewoo Shipbuilding & Marine Engineering
Daewoo Shipbuilding & Marine Engineering Co., Ltd ( ko, 대우조선해양; abbreviated DSME) is one of the "Big Three" shipbuilders of South Korea, along with Hyundai and Samsung.
History
On 21 February 2011, the A. P. Moller-Maersk Group (Ma ...
, and the now bankrupt STX Offshore & Shipbuilding.
Electronics
Electronics is one of South Korea's main industries. During the 1980s through the 2000s, South Korean companies such as Samsung
The Samsung Group (or simply Samsung) ( ko, 삼성 ) is a South Korean multinational manufacturing conglomerate headquartered in Samsung Town, Seoul, South Korea. It comprises numerous affiliated businesses, most of them united under the ...
, LG and SK led South Korea's growth in this sector. In 2017, 17.1% of South Korea's exports were semiconductors produced by Samsung Electronics
Samsung Electronics Co., Ltd. (, sometimes shortened to SEC and stylized as SΛMSUNG) is a South Korean multinational corporation, multinational electronics corporation headquartered in Yeongtong-gu, Suwon, South Korea. It is the pinnacle of ...
and SK Hynix
SK hynix Inc. is a South Korean supplier of dynamic random-access memory (DRAM) chips and flash memory chips. Hynix is the world's second-largest memory chipmaker (after Samsung Electronics) and the world's third-largest semiconductor company ...
. Samsung and LG are also major producers in electronic devices such as televisions, smartphones
A smartphone is a portable computer device that combines mobile telephone and computing functions into one unit. They are distinguished from feature phones by their stronger hardware capabilities and extensive mobile operating systems, which ...
, display
Display may refer to:
Technology
* Display device, output device for presenting information, including:
** Cathode ray tube, video display that provides a quality picture, but can be very heavy and deep
** Electronic visual display, output devi ...
, and computers
A computer is a machine that can be programmed to carry out sequences of arithmetic or logical operations (computation) automatically. Modern digital electronic computers can perform generic sets of operations known as programs. These programs ...
.
Automobile
The automobile industry was one of South Korea's major growth and export industries in the 1980s. By the late 1980s, the capacity of the South Korean motor industry had increased more than fivefold since 1984; it exceeded 1 million units in 1988. Total investment in car and car-component manufacturing was over US$3 billion in 1989. Total production (including buses and trucks) for 1988 totaled 1.1 million units, a 10.6 percent increase over 1987, and grew to an estimated 1.3 million vehicles (predominantly passenger cars) in 1989. Almost 263,000 passenger cars were produced in 1985—a figure that grew to approximately 846,000 units in 1989. In 1988 automobile exports totaled 576,134 units, of which 480,119 units (83.3 percent) were sent to the United States. Throughout most of the late 1980s, much of the growth of South Korea's automobile industry was the result of a surge in exports; 1989 exports, however, declined 28.5 percent from 1988. This decline reflected sluggish car sales to the United States, especially at the less expensive end of the market, and labor strife at home. South Korea today has developed into one of the world's largest automobile producers. The Hyundai Kia Automotive Group is South Korea's largest automaker in terms of revenue, production units and worldwide presence.
Mining
Most of the mineral deposits in the Korean Peninsula are located in North Korea, with the South only possessing an abundance of tungsten and graphite. Coal, iron ore, and molybdenum are found in South Korea, but not in large quantities and mining operations are on a small scale. Much of South Korea's minerals and ore are imported from other countries. Most South Korean coal is anthracite that is only used for heating homes and boilers.
In 2019, South Korea was the 3rd largest world producer of bismuth
Bismuth is a chemical element with the Symbol (chemistry), symbol Bi and atomic number 83. It is a post-transition metal and one of the pnictogens, with chemical properties resembling its lighter group 15 siblings arsenic and antimony. Elemental ...
, the 4th largest world producer of rhenium
Rhenium is a chemical element with the symbol Re and atomic number 75. It is a silvery-gray, heavy, third-row transition metal in group 7 of the periodic table. With an estimated average concentration of 1 part per billion (ppb), rhenium is one ...
, and the 10th largest world producer of sulfur
Sulfur (or sulphur in British English) is a chemical element with the symbol S and atomic number 16. It is abundant, multivalent and nonmetallic. Under normal conditions, sulfur atoms form cyclic octatomic molecules with a chemical formula ...
.
Construction
Construction has been an important South Korean export industry since the early 1960s and remains a critical source of foreign currency and ''invisible'' export earnings. By 1981 overseas construction projects, most of them in the Middle East, accounted for 60 percent of the work undertaken by South Korean construction companies. Contracts that year were valued at US$13.7 billion. In 1988, however, overseas construction contracts totaled only US$2.6 billion (orders from the Middle East were US$1.2 billion), a 1 percent increase over the previous year, while new orders for domestic construction projects totaled US$13.8 billion, an 8.8 percent increase over 1987. South Korean construction companies therefore concentrated on the rapidly growing domestic market in the late 1980s. By 1989 there were signs of a revival of the overseas construction market: the Dong Ah Construction Company signed a US$5.3 billion contract with Libya to build the second phase (and other subsequent phases) of Libya's Great Man-Made River Project, with a projected cost of US$27 billion when all 5 phases were completed. South Korean construction companies signed over US$7 billion of overseas contracts in 1989. Korea's largest construction companies include Samsung C&T Corporation
Samsung C&T Corporation ("Construction & Trading Corporation"; formerly Samsung Corporation; Korean: 삼성물산), is a South Korean construction and engineering company. It was founded in 1938 as the first Samsung company and was initially in ...
, which built some of the highest building's and most noteworthy skyscrapers such as three consecutively world's tallest buildings: Petronas Towers
The Petronas Towers, also known as the Petronas Twin Towers or KLCC Twin Towers, (Malay: ''Menara Berkembar Petronas'') are 88-storey supertall skyscrapers in Kuala Lumpur, Malaysia, standing at . From 1998 to 2003, they were officially design ...
, Taipei 101
Taipei 101 (; stylized as TAIPEI 101), formerly known as the Taipei World Financial Center, is a supertall skyscraper in Taipei, Taiwan. This building was officially classified as the world's tallest from its opening in 2004 until the 2009 ...
, and Burj Khalifa
The Burj Khalifa (; ar, برج خليفة, , Khalifa Tower), known as the Burj Dubai prior to its inauguration in 2010, is a skyscraper in Dubai, United Arab Emirates. It is known for being the world’s tallest building. With a total height ...
.
Armaments
During the 1960s, South Korea was dependent on the United States to supply its armed forces, but after the elaboration of President Richard M. Nixon's policy of Vietnamization in the early 1970s, South Korea began to manufacture its own weapons.
Since the 1980s, South Korea has begun exporting military equipment and technology to boost its international trade. Some of its key military export projects include the T-155 Firtina self-propelled artillery for Turkey
Turkey ( tr, Türkiye ), officially the Republic of Türkiye ( tr, Türkiye Cumhuriyeti, links=no ), is a list of transcontinental countries, transcontinental country located mainly on the Anatolia, Anatolian Peninsula in Western Asia, with ...
; the K11 air-burst rifle for United Arab Emirates
The United Arab Emirates (UAE; ar, اَلْإِمَارَات الْعَرَبِيَة الْمُتَحِدَة ), or simply the Emirates ( ar, الِْإمَارَات ), is a country in Western Asia (The Middle East). It is located at th ...
; the Bangabandhu class guided-missile frigate for Bangladesh
Bangladesh (}, ), officially the People's Republic of Bangladesh, is a country in South Asia. It is the eighth-most populous country in the world, with a population exceeding 165 million people in an area of . Bangladesh is among the mos ...
; fleet tankers such as Sirius class for the navies of Australia
Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...
, New Zealand
New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island count ...
, and Venezuela
Venezuela (; ), officially the Bolivarian Republic of Venezuela ( es, link=no, República Bolivariana de Venezuela), is a country on the northern coast of South America, consisting of a continental landmass and many islands and islets in th ...
; Makassar class amphibious assault ships for Indonesia
Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Guine ...
; and the KT-1 trainer aircraft for Turkey
Turkey ( tr, Türkiye ), officially the Republic of Türkiye ( tr, Türkiye Cumhuriyeti, links=no ), is a list of transcontinental countries, transcontinental country located mainly on the Anatolia, Anatolian Peninsula in Western Asia, with ...
, Indonesia
Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Guine ...
and Peru
, image_flag = Flag of Peru.svg
, image_coat = Escudo nacional del Perú.svg
, other_symbol = Great Seal of the State
, other_symbol_type = Seal (emblem), National seal
, national_motto = "Fi ...
.
South Korea also exports various core components of other countries' advanced military hardware. Those hardware include modern aircraft such as F-15K
The McDonnell Douglas (now Boeing) F-15E Strike Eagle is an American all-weather multirole strike fighter derived from the McDonnell Douglas F-15 Eagle. The F-15E was designed in the 1980s for long-range, high-speed interdiction without rely ...
fighters and AH-64
The Boeing AH-64 Apache () is an American twin-turboshaft attack helicopter with a tailwheel-type landing gear arrangement and a tandem cockpit for a crew of two. It features a nose-mounted sensor suite for target acquisition and night visi ...
attack helicopters which will be used by Singapore, whose airframes will be built by Korea Aerospace Industries
Korea Aerospace Industries (Korean: 한국항공우주산업, Hanja: 韓國航空宇宙産業) (KAI) is a South Korean aerospace and defense company. It was originally established as a joint venture of Samsung Aerospace, Daewoo Heavy Industries' ...
in a joint-production deal with Boeing. In other major outsourcing and joint-production deals, South Korea has jointly produced the S-300 air defense system of Russia via Samsung Group
The Samsung Group (or simply Samsung) ( ko, 삼성 ) is a South Korean multinational manufacturing conglomerate headquartered in Samsung Town, Seoul, South Korea. It comprises numerous affiliated businesses, most of them united under the ...
, and will facilitate the sales of Mistral class amphibious assault ships to Russia that will be produced by STX Corporation
STX Corporation (Hangul: 에스티엑스) is a publicly held South Korean holding company engaged in the provision of trading services. Headquartered in Gyeongsangnamdo, South Korea, the company operates its business through two divisions: trad ...
. The deal was cancelled in 2014 due to Russia's actions in Ukraine and the ships were sold to Egypt instead. South Korea's defense exports were $1.03 billion in 2008 and $1.17 billion in 2009.
Tourism
In 2012, 11.1 million foreign tourists visited South Korea, making it one of the most visited countries in the world, up from 8.5 million in 2010. Many tourists from all around Asia visit South Korea which has been due to the rise of Korean Wave (''Hallyu'').
Seoul
Seoul (; ; ), officially known as the Seoul Special City, is the capital and largest metropolis of South Korea.Before 1972, Seoul was the ''de jure'' capital of the Democratic People's Republic of Korea (North Korea) as stated iArticle 103 ...
is the principal tourist destination for visitors; popular tourist destinations outside of Seoul include Seorak-san
Seoraksan is the highest mountain in the Taebaek mountain range in the Gangwon Province in eastern South Korea. It is located in a national park near the city of Sokcho. After the Hallasan volcano on Jeju Island and Jirisan in the south, Seora ...
national park, the historic city of Gyeongju
Gyeongju ( ko, 경주, ), historically known as ''Seorabeol'' ( ko, 서라벌, ), is a coastal city in the far southeastern corner of North Gyeongsang Province in South Korea. It is the second largest city by area in the province after Andong, ...
and semi-tropical Jeju Island.
In 2014 South Korea hosted the League of Legends season 4 championship and then, in 2018, the season 8 championship.
Trade statistics
Mergers and acquisitions
Since 1991 there has been a steady upwards trend in South Korean M&A until 2018 with only a short break around 2004. Since 1991 around 18,300 deals in, into or out of South Korea have been announced, which sum up to a total value of over 941. bil. USD. The year 2016 has been the year with the largest deal value (1,818 in bil. USD) and the most deals (82,3).
Target industries are distributed very evenly with no industry taking a larger share than 10%. The top three target industries are Electronics (9.7%), Semiconductors (9.1%) and Metals and Mining (7.7%). However, over 51% of the acquiring companies originate from the financial and brokerage sector.
See also
*Economy of North Korea
The economy of North Korea is a centrally planned economy, following ''Juche'', where the role of market allocation schemes is limited, although increasing. , North Korea continues its basic adherence to a centralized command economy. With a t ...
* List of banks in South Korea
*List of companies of South Korea
South Korea is a sovereign state in East Asia, constituting the southern part of the Korean Peninsula. Highly urbanized at 92%, South Koreans lead a distinctive urban lifestyle; half of them live in high-rises concentrated in the Seoul Capital ...
*List of largest companies of South Korea
This article lists the largest companies in South Korea in terms of their revenue, net profit and total assets, according to the American business magazines ''Fortune'' and ''Forbes''.
2020 ''Fortune'' list
This list displays all 14 Korean com ...
*List of South Korean regions by GDP
This is a list of South Korean regions by GDP. All data are sourced from the latest regional statistics published by the South Korean Government, the OECD and the International Monetary Fund (IMF).[Poverty in South Korea
Poverty in South Korea has been in drastic decline since the mid-20th century, particularly the absolute poverty rate. Relative poverty was also in decline until the late 1990s, but has risen since then. While only about 2% of South Koreans are aff ...]
*Retailing in South Korea
Retailing in South Korea consists of hypermarkets, department stores, flea markets, traditional markets, and underground shopping malls. Hypermarkets sell dry goods and groceries, similar to Western supercentres. Traditional markets are also popula ...
*Unemployment in South Korea
The unemployment rate in the South Korea, Republic of Korea as of December 2021 is 3.7 percent. Since its rapid Globalization, globalization and Democratization, democratization, the unemployment rate has been comparatively low compared to most ...
*Trade unions in South Korea The Ministry of Employment and Labor announced on December 30 2021 that as of 2020, 14.2% of workers were in trade unions in South Korea, a 1.7% increase from 12.5% in 2019. Korea's unionization rate peaked in 1989 at 19.8% and fell to 10% 2004.
* Work–life balance in South Korea
*Youth unemployment in South Korea
The rate of youth unemployment in South Korea fluctuated in the 9–11% range between 2001 and 2014. It was above 10% in 2018 and down to 7.1% by the end of 2019 - the lowest level since 2011.
Overall youth unemployment rate in South Korea
Ac ...
References
Further reading
*Koh, Jae Myong (2018) ''Green Infrastructure Financing: Institutional Investors, PPPs and Bankable Projects'', London: Palgrave Macmillan. .
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* Essays on such topics as American-educated technocrats in the 1960s and their role in South Korea's economic growth, and entrepreneurial family companies in South Korea, as well as China and Japan.
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External links
Statistics Korea
Ministry of Economy and Finance (South Korea)
Korea Customs Service
Bank Of Korea
World Bank Summary Trade Statistics South Korea
South Korea – OECD
South Korea profile
at the CIA World Factbook
''The World Factbook'', also known as the ''CIA World Factbook'', is a reference resource produced by the Central Intelligence Agency (CIA) with almanac-style information about the countries of the world. The official print version is available ...
South Korea profile
at The World Bank
The World Bank Group (WBG) is a family of five international organizations that make leveraged loans to developing countries. It is the largest and best-known development bank in the world and an observer at the United Nations Development Grou ...
{{DEFAULTSORT:Economy Of South Korea
Economy of South Korea
World Trade Organization member economies
OECD member economies