HEADWINDS:Accelerating world trade growth and more competitive regional rivals, such as Cambodia, Myanmar and Laos, will make competition for market share fierce
Date: Mar 29, 2017
South Korean workers’ wages are rising faster than those of regional rivals and the power of the nation’s sprawling family-run conglomerates, or chaebols, remains unchecked, highlighting a lack of serious economic reform. Yet, manufacturing exports are booming.
Taiwan’s labor costs are cheap and its effective exchange rate far more competitive, yet overseas shipments have been flailing.
The divergence, set out in an Oxford Economics report, deepens given the similar export mixes of the two developed economies — indeed, an indicator of trade similarity stands at 0.67, high given that 1.0 represents an identical mix.
The two also essentially ship goods to the same markets. Yet, South Korean export volume surged 5.3 percent yearly from 2010 to last year, compared with just 1.4 percent for Taiwan. [FULL STORY]