News from South Korea reveals that previously, at an internal meeting, Moon Jae-in announced that at the Inter-Korean summit, he had presented North Korea's leader Kim Jong-un with a USB drive containing an e-book and presentation on the "New Economic Map of the Korean Peninsula" as well as information about power stations. Shortly after that, Samsung shut down all its manufacturing operations in China, including its enterprise in Shenzhen.
With regard to the recent actions in the South Korean government and the South Korean conglomerate, Anbound Think Tank's analysis noted, even though the peace process between North and South Korea is obviously plagued with uncertainties, South Korea appears to be undeterredly optimistic about the future economic prospects of their cooperation.
North Korea has a population of only 25 million people, and its largest city, Pyongyang, only has a population of 3.2 million people. Its other cities, mostly, have populations of only about 30,000, with per capita GDP estimated at 530 US dollars or so. In a sharp contrast with South Korea, there is a population of 51 million and per capita GDP more than 27,500 U.S. dollars. SK economic growth is clost to a point of saturation, and its export-oriented economic model is increasingly challenged from trade protectionism.
In an assumption of the "integration and unification" into one Korean economy, South Korea will be able to gain an increase of about 50 % in its population from North Korea. While North Korea's GDP of 12.8 billion U.S. Dollars is practically inconsequential next to South Korea's GDP, it also means that the growth of South Korea's GDP could increase by almost 50% with a base of US$1.4 trillion. It could even reach a scale of more than US$2.1 trillion, which is equivalent to about half of Japan's GDP and more than the GDPs of Brazil, Italy and Canada. Since the South Korean economy is based on a so-called "consortium economy" model, more than 85% of the national economy is attributed to the top ten consortia in South Korea. Accordingly, giant conglomerates like Samsung and Hyundai will be the major beneficiaries of South Korea's economic growth, and these conglomerates will theoretically be able to maintain a fairly high growth rate in next 10 years.
If we were to make a prediction about how Asia's future economic trends, it can be said that Japan and China, and even the United States, will not be able to reap any significant benefits from the unification of Korea, but they should already be satisfied as long as they do not need to provide too much financial assistance. Moreover, South Korea will be the only beneficiary of North Korea's growing market and its abundance of cheap labour. China used to have a certain amount of North Korean labour in the past, but that was only because of unique political circumstances—North Korea was being snubbed by the world at that time and China was its only source of foreign remittance. Once North and South Korea are "unified" (or rather, economically unified), the situation will be significantly different, for it is likely that their shared language and shared enthusiasm will accelerate a comprehensive integration. Should such circumstances emerge, both China and Japan will only be able look on as observers.
Perhaps it can then be said that China will not only not reap any economic benefits but will also face competition from the lower-costs offered by Korea in the global market. In this sense, Japan may be a little better off than China as it is more technologically advanced and also has a traditional relationship of cooperation with Korean businesses. With regard to the US, there is still a lot of uncertainty in terms of changing geopolitical interests, but regardless of that, the benefits that the US might be able to reap are likely to be limited as well. It is also possible that the unification of North and South Korea will be able to contribute to a 1% growth of the global GDP which currently stands at the formidable sum of 74 trillion U.S. dollars. Of course, all of the above analyses have been based on assumptions and speculations and can therefore only serve as a reference about future trends. Nonetheless, as things currently stand, there is still a great deal of uncertainty about whether or not these scenarios will actually unfold.
Final Analysis and Conclusion:
There are still many obstacles to be overcome along the path of the unification of North and South Korea, some of which include ideological differences, a lack of financial capital, the issue of nuclear weapons, as well as internal political instability. Additionally, the political climate of and developments in the US could also pose potential challenges to the unification of Korea. In order to best avoid risks in such uncertain times, the only thing left to do is to stay vigilant and constantly be on the lookout for ongoing changes.
