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Discussion Starter · #1 ·
A shocking clause of just concluded US-Korea FTA was revealed.

It reads that US will accept all of North Korea as a free trade zone should certain preconditions(Giving up nuke and formalizing relations?) are met. Meaning North Korea just became a major export power overnight with unrestricted access to US market and 0% tariff on industrial goods. Looks like a similar term will be inserted in forthcoming EU-Korea FTA.

This is a shocking provision, since global auto-giants could just bypass China and move to North Korea to get both free access to US and EU markets and 0% tariff, while paying "Below China" wages.

This is a bad news for China's aspring auto export industry, since they now face an unexpected tough competitor called North Korea. China's only hope is to bribe Kim Jong Il to not seek that FTZ status.
 

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Again, you're out of your mind. Companies are not going to North Korea anytime soon. Also, China's auto industry is and will continue to be driven by its vast domestic market and not exports.
 

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Discussion Starter · #3 ·
Companies are not going to North Korea anytime soon.
Once that FTZ status is granted, North Korea is the new mad gold-rush; the repeat of China in the late 80s/early 90s.

Also, China's auto industry is and will continue to be driven by its vast domestic market and not exports.
True, Chinese domestic auto market will continue to grow at an exceptional rate. However, Chinese will not become a major auto export engine like Japan and Korea were.
 

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1. : "However, Chinese will not become a major auto export engine like Japan and Korea were."
Why not?
2. North Korean motor vehicle industry has the impressive result of a production of est. 3000 in 3 years! What are we talking about?
 

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Discussion Starter · #5 ·
1. Trade Disputes over China's massive surplus. Now you want to add cars to the surplus?
2. NK offers better export condition than China does in the form of lower wages and 0% tariff.

North Korean motor vehicle industry has the impressive result of a production of est. 3000 in 3 years! What are we talking about?
Foreign plants can be built in a couple of years once than FTZ status is granted.
 

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NK is one of the poorest countries in the world. Building new factories, machines and training workers would take many, many years. Money is not everything. If car manufacturers want cheap labor then they would be building cars in Africa. It's the workforce, good location and raw materials which form the big picture.

NK is also dependant on China. Without China's economical help the country would have already collapsed. That's why NK will not do anything sudden against China. And knowing NK's reputation of blackmailing I don't see how any country would trust to do deal with them.
 

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Discussion Starter · #7 ·
Building new factories, machines and training workers would take many, many years.
Well, it didn't take China too long to turn around.

It's the workforce
No problem.

good location
An hour's drive from Seoul.

raw materials
This is not required, or Japan and Korea would not have built their export engines.

NK is also dependant on China.
This provision is intended to break just that.

Without China's economical help the country would have already collapsed.
With auto assembly and part plants running, no Chinese aid needed.

That's why NK will not do anything sudden against China.
Of course not. They just ship millions of cars and auto parts to the US and eat into Chinese market share.

And knowing NK's reputation of blackmailing I don't see how any country would trust to do deal with them.
This is actually Chinese auto industry's last hope. If all things work out as planned, then Chinese auto exports cannot compete with North Korean auto exports.

Global Auto Giants guaranteed to move into NK once that FTZ status is granted.
- Hyundai/Kia
- GM

Auto companies considering moving into NK.
- SAIC(Ssangyong's new NK plant would be closer to Seoul than any of available spots in the South)
 

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I agree with your optimism given the incredible responsiveness Mr Kim Jung Il has shown toward what the US has to say.

In a few weeks, I fully expect the millions of troops stationed along parallel 38 to be trained into tourist guides.

Real_I_Hate_China said:
A shocking clause of just concluded US-Korea FTA was revealed.

It reads that US will accept all of North Korea as a free trade zone should certain preconditions(Giving up nuke and formalizing relations?) are met. Meaning North Korea just became a major export power overnight with unrestricted access to US market and 0% tariff on industrial goods. Looks like a similar term will be inserted in forthcoming EU-Korea FTA.

This is a shocking provision, since global auto-giants could just bypass China and move to North Korea to get both free access to US and EU markets and 0% tariff, while paying "Below China" wages.

This is a bad news for China's aspring auto export industry, since they now face an unexpected tough competitor called North Korea. China's only hope is to bribe Kim Jong Il to not seek that FTZ status.
 

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I think we've come to the conclusion that RIHC is a truly delusional Korean ultra-nationalist. He's got shit for brains, and I think this thread is the final nail in the coffin.

Apparently, China, a huge country with 1.3 billion people and immense resources is a country that "can never make it", "has no chance", and will never be a global industrial competitor.

But North Korea, a half starving country of less than 30 million, is about to overtake China and become a great industrial superpower, draining China of all its investments and industries.

We are dealing with a true sociopathic idiot.
 

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Discussion Starter · #10 ·
Apparently, China, a huge country with 1.3 billion people and immense resources is a country that "can never make it", "has no chance", and will never be a global industrial competitor.
I never said such a thing. I specifically concluded that Chinese will not become a major automotive exporter to developed world because the market condition is hostile toward poor quality Chinese vehicles competing on price alone. Now that pricing advantage may be gone as well.

But North Korea, a half starving country of less than 30 million, is about to overtake China and become a great industrial superpower, draining China of all its investments and industries.
It is you alone who draw such conclusion. NK does have a much more favorable auto export environment than China does thanks to the FTA, drawing foreigners seeking to expand capacity there over China.
 

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Lil Kim with the K-Pop Afro at the helm, and N Korea is about to become the next economic superpower??? :lol:

Even Vietnam, with much favorable conditions than NK, including a 80mil young and educated population, is not about to overtake China; so there's no doubt in my mind NK is never going to get there. (And Vietnam's got lots of natural resources including oil, what does NK got? Dirt and rocks?)

I don't want to knock NK, for I have nothing against them. But to say they are overtaking China's business is laughable to say the least.
 

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Discussion Starter · #12 ·
N Korea is about to become the next economic superpower???
No, it will overtake China in auto exports to the US thanks to the FTA. And to EU since Korea has been inserting this "NK" clause in every FTA it negotiated. I am not sure if the Euros will warm up to the idea of giving NK the same FTZ status as Americans did. The US agreed to give NK the FTZ on two reasoning.

1. To take NK out of Chinese influence.
2. To hurt Chinese in two specific industries, namely clothing/textile, and automobile/auto parts industry.

Chinese long term prospect in the US market got a lot tougher, possibly shut, because of this stunning provision.

Even Vietnam, with much favorable conditions than NK, including a 80mil young and educated population, is not about to overtake China
And neither did I suggest that NK would become one. It is just that Korean automobiles/auto parts stand to double in their US market share to 2 million vehicles/year whether they are built in the north, south, or USA, leaving fewer slice of pie for the Chinese.

(And Vietnam's got lots of natural resources including oil, what does NK got? Dirt and rocks?)
0% tariff unrestricted acces to US market and below Chinese wages. And a full-blown infrastructure 15 km down the south.

You bet Nike would be the first one to get their factory out of China and move into NK since they now get to knock $10 off their $30 Chinese sneakers.

I don't want to knock NK, for I have nothing against them. But to say they are overtaking China's business is laughable to say the least.
Nah, just export-oriented industries. All the foreign investments aimed at Chinese domestic market will continue to flow into China. All the export oriented industries will certainly redirect to NK once the FTZ is granted, because NK offers much more favorable terms.
 

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No industries will go into NK with lil Kim in power. Take that to the bank.

Political stability is #1 in investment. Better believe it.
 

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Discussion Starter · #14 ·
Even Japanese are talking about moving to Korea to survive after the KORUS FTA

Japanese supporters say a pact with the U.S., which bought some $148 billion of Japanese goods in 2006, would especially help small and medium-sized companies who are not big enough to avoid tariffs by setting up shop in the U.S.

For now, those producers might have to look into setting up companies in South Korea and export to the U.S. that way to take advantage of the tariff cuts, said Hatakeyama.
These Japanese companies are willing to move into Korea just to take advantage of 0% tariff and no quota even though there is no wage difference.

You bet there's going to be a massive influx of Japanese and Korean automobile-related companies moving into North Korea once the FTZ is granted.
 

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Discussion Starter · #15 ·
BringIt said:
No industries will go into NK with lil Kim in power. Take that to the bank.

Political stability is #1 in investment. Better believe it.
The whoel FTZ thing is a carrot to get Kim Jong Il out of wood and "behave". Chinese's only hope is to somehow convince Kim Jong Il to not take the carrot and turn away tens of billions in foreign direct investment.
 

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Real_I_Hate_China said:
Japanese supporters say a pact with the U.S., which bought some $148 billion of Japanese goods in 2006, would especially help small and medium-sized companies who are not big enough to avoid tariffs by setting up shop in the U.S.

For now, those producers might have to look into setting up companies in South Korea and export to the U.S. that way to take advantage of the tariff cuts, said Hatakeyama.
That's a typo. I'm sure they meant North.
 

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Real_I_Hate_China said:
The whoel FTZ thing is a carrot to get Kim Jong Il out of wood and "behave". Chinese's only hope is to somehow convince Kim Jong Il to not take the carrot and turn away tens of billions in foreign direct investment.
FTZ goes both ways my friend. Korean farmers stand to lose big time in this deal (You think Americans are stupid?) American companies will have unrestricted access to Korean markets too.

Also, if lil Kim and his regime is sane, they would have opened up LONG LONG TIME AGO and bring in foreign investments, much like Russia, China, and Vietnam. This FTZ ain't gonna open them up, not with this guy, maybe the next dear leader - that is less crazy.
 

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Discussion Starter · #18 ·
FTZ goes both ways my friend. Korean farmers stand to lose big time in this deal (You think Americans are stupid?)
Actually not for NK.

American companies will have unrestricted access to Korean markets too.

Also, if lil Kim and his regime is sane, they would have opened up LONG LONG TIME AGO and bring in foreign investments, much like Russia, China, and Vietnam. This FTZ ain't gonna open them up, not with this guy, maybe the next dear leader - that is less crazy.
You are trying to predict the thoughts of an unpredictable man.
 

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And the unpredictable man is predictably going to work with the USA.

By the way, forfot where I got the idea that ALL of North Korea is included in a FTZ. Anyone cares to remind me?
 

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Real_I_Hate_China said:
Actually not for NK.


You are trying to predict the thoughts of an unpredictable man.
Yeah, because businesses will find it so attractive to invest in a country run by a lunatic on a perpetual bad hair day.

You were an idiot before, but you're really going off the deep end on this one.
 
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