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WKF: S. Korea, Chinese Economies Passed Worst H1, Recovery Won’t Be Same: Economists
South Korean and Chinese economies have passed the worst after suffering contraction in the first half as they had coped relatively faster to virus outbreak, but their path beyond 2020 would be different as China still has ample resources available to run at pre-crisis level while Korea’s growth would stay below potential rate due to regulatory load and demographic challenges, experts warned. Justin Yifu Lin, professor of Peking University and one of China’s best-known economists, projected an annualized growth of 3 percent this year for China, which would be the worst since the socialist economy implemented opening and reforms in 1978. The No. 2 economy would then pick up 8 to 10 percent next year, maintaining comfortable lead over the global economy and continue to “drive” the economy with an average 30 percent contribution to the global GDP, he said. Given the ample fiscal and monetary ammunitions, Beijing authorities have the means to push growth at more than 10 percent in the second half to meet its annual target of 5.3 percent this year. Although possible, “that would be not desirable,” Lin said as he joined the World Knowledge Forum conference in Seoul on the global economy and outlook amid pandemic virtually from Beijing. “Unless all the country control the pandemic, we cannot call victory over pandemic,” and Beijing should “reserve policy space for the future,” he said. For next year, he cited conflict with the U.S. e a bigger downside risk than the pandemic, although it won’t be fully combated next year. Cho Dong-chul, professor on the School of Public Policy and Management under state-run Korea Development Institute who until April had been a member of the Bank of Korea monetary policy board, was less sanguine about his own country’s economy. He agreed the world economy as well as Korea’s has passed the worst from the pandemic in the second quarter as “the damages from second and third wave” would have lesser economic impact as the world has become better adaptive with the virus. Although the situation won’t recover until vaccine or effective cure arrives, the Korean economy would likely slowly recover from the recession in the first half. But its rebound won’t be as big as in the aftermath of contractions in the past as Korea has become less agile and been losing much of dynamism due to “overload” of regulations and thinning working population. Cho projected Korea’s economy to run at 2 percent, below its growth potential, over the next five years. The former member of the BOK monetary board expected the central bank to keep loose policy until it is confident the economy is back on “solid track”, and less likely to move to preemptively address risks from asset bubbles. Organization for Economic Cooperation and Development Secretary-General Angel Gurria in pre-taped message called for stronger international cooperation to help end the COVID-19, speed the recovery and prevent future crises. Despite the trillions of dollars spent by the governments to fight and stimulate their economies to cause a high burden of public debt, “we should be careful not to withdraw the emergency measures too quickly. As we address these challenges we need to start thinking and planning what will be what I would quote the new economic normal,” he said. By Hye-seung Seo[Photo by Han Joo-hyung][ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]
2020.09.21
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WKF: Businesses Must Ride Out the Pandemic On Cloud: Vogels of Amazon
The cloud technology will be pivotal in the transitional times when the pandemic has forced rapid changes in business and individual life styles, according to Werner Vogels, chief technology officer and vice chairman of U.S. e-commerce giant Amazon.com. “The cloud is built for uncertain times just like this,” Vogels said in a virtual session at the 21st World Knowledge Forum in Seoul invited to speak on the role of the cloud in a post-pandemic world. “The role the cloud will play in the future is similar to the role it plays today, that is to enable companies to get their ideas to market more quickly with less risk and the ability to scale their business.” Vogels noted business leaders need to make serious adjustment to the way they think about technology, culture and innovation, referring to COVID-19 as “a forcing function for significant change” in the way companies create products and organizations hire and develop their workforce. In the longer term, he said it will change “how a company thinks about culture and organizational structure and who within the organization will have the most impact on its success by democratizing influence to developers, engineers, and builders.” Vogels stressed “every company in the world is reassessing their business strategy” due to COVID-19. Many of them are accelerating cloud migration and modernization work, and others also are trying to gain the same type of agility to stay competitive and respond to challenges coming their way. “The pandemic has been devastating but I`m convinced that it would have been much worse were it not for the technology that we have available today,” he emphasized. “The changes I foresee will primarily come about through culture and organizational structure changes with cloud at the center as an enabler to companies doing this (making batter technology decisions).” Vogels expected business success will come from “faster innovation cycles” and thus companies should stay innovative, experiment frequently, and embrace risk-taking. To truly make this part of a company’s DNA with workforces becoming more distributed, he advised “microteams” that are small enough to move quickly and efficiently to solve a problem would be ideal in a post-pandemic and increasingly remote world. “The concept of a company network will be forced to evolve. Cloud technologies that enable companies to secure their IP and assets while enabling their remote workforce will become critically important,” Vogels said, suggesting “take this time to invest in your workforce to get a solid cloud foundation that better future-proofs your business.” When asked his advice for the Korean companies seeking for digital transformation to stay competitive in the market, Vogels said, “the faster you will be able to be on solid footing for your digital transformation, the better.” “But as always, it’s now just about technology,” he added, “it is also about cultural change and make sure that you start thinking about how to create a culture of innovation, how to hire the right people that can help you make go through this digital transformation.” By Lee Ha-yeon[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]
2020.09.21
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WKF: Diplomatic Experts Say New Cold War Could be Fixture of Int’l Order
The new Cold War-like hegemonic struggle between the United States and China is expected to continue, regardless of who wins the next U.S. election, diplomatic experts agreed. “We have to realize that this competition between the two powers is likely to last for some time,” said Edwin Feulner, president and co-founder of the American conservative think tank Heritage Foundation, as he joined virtually for a session on “The Second Cold War” at the World Knowledge Forum in Seoul on Thursday. Even if President Trump loses his bid for re-election, the U.S. is unlikely to go back to the pre-Trump era of “good relations” with China. “It’s not just economic issues that are at stake but strategic issues, military issues, rule of law, and human rights issues that are at the forefront,” Feulner said. Guohong Qiu, former Chinese ambassador to South Korea, said the advent of a new Cold War ultimately depends on America’s policy toward China. Qiu said it was “not China’s intention to challenge the U.S. or replace its status” and that the current conflict is different from the previous Cold War as the China and the U.S. are highly integrated economically. But he argued that the current U.S. containment was largely an effort to “delay China’s development” and “ensure America’s absolute advantage in every facet.” “The current dispute has mainly been provoked by the U.S., with China forced to respond against America’s extreme suppression to prevent a full confrontation,” Qui said. He warned that the U.S. efforts to decouple the American economy from China would not only “damage the world economy” but end up having a “greater impact on the U.S. than China.” The widening conflict between Washington and Beijing puts Seoul in an awkward position, demanding it to face a moment of truth, said former Korean Foreign Minister Yoon Young-kwan. “Korea has to accept the reality of this new normal of severe strategic competition between China and the U.S.,” he said. “Korea’s diplomacy needs to help both superpowers establish a kind of modus vivendi, or peaceful coexistence, if we are to avoid difficult situations of having to choose one country over another.” Yoon said that in this time of great political divide, it is important for the top U.S. leader to mobilize political support and form a coalition of like-minded countries to persuade China to respect international rules and lead a new way toward coexistence. For China, he advised prudence in implementing foreign policy as its ambitious projects like the Belt and Road initiative and efforts to exert more power in Asia and Eurasia could antagonize neighbors and cause them to form a united anti-Chinese front. By Kim Hyo-jin[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]
2020.09.21
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WKF: S. Korea Becoming a Global Trend-Setter Amid Pandemic Pall: Instagram COO
South Korea has become a “trend-setter” for homebound people around world amid pandemic from its unique coffee recipe “Dalgona” to latest fashion and beauty tips and news on K-pop stars, according to an Instagram executive. As the world has entered into an “unprecedented period” after the pandemic outbreak, Instagram has been bridging individuals and businesses with their existing customers and also aiding each global person eager to discover their next favorite business, said Justin Osofsky, Chief Operating Officer of Instagram. Korea is “uniquely shaped” in terms of global impact as evidenced by K-pop and Dalgona coffee, so the market is very important to the platform as a global trend setter, he said as he took questions from audience hooked up to his presentation at the 21st World Knowledge Forum held from Seoul on Thursday. The pandemic crisis has redefined and enhanced the role of social media with greater responsibilities to meet the changing demands and keep the mankind safer, “By tapping into shared interest in culture, businesses can foster deeper, more meaningful connections with existing and new customers, which can directly into business growth,” he said. Osofsky leads Instagram operations and business development with a mission to help the company scale globally. Prior to his role at Instagram, he served as Vice President of Facebook where he led global operations and corporate development. Instagram’s mission to “keep people safe, bring people together, support businesses and creators” has been highlighted by the pandemic, he said, while the social networking platform keeps changing their focus and strategies to serve the world’s rapidly changing needs. Since the pandemic makes it difficult for people to connect with each other, Instagram has been serving as an important channel to bring people together, he said. Global users can meet K-pop stars including Henry and Nafla and world-known famous pianists Cho Seong-jin in their living room via Instagram Live in real time, and Korean born Dalgona coffee, the creamy latte drink made with instant coffee and sugar, also gained world recognition as recipes went viral on Instagram. Instagram supports businesses and creators more than ever, he said, as the platform “became indispensable tools to businesses of all sizes and small businesses, in particular” to help them reach out to more consumers. Citing a recent survey that showed people are spending more time on their devices and shop more online, he insisted that companies more than ever have to establish a “digital presence.” He said Instagram partnered with regional food delivery businesses such as Baemin, Yogiyo and Honeybees to give consumers ways to support the businesses they love through the new tools such as gift cards and food order stickers that the platform has recently introduced. Companies are advised to aggressively use technologies such as augmented reality (AR) to “bring fun into their business”, he said, citing Pinkfong that launched AR camera filter called baby shark handwash challenge in which more than 72,000 people have participated. As the world has entered into an “unprecedented period” after the pandemic outbreak, Instagram wants to become “an invaluable tool that can not only connect with their existing customers, but each a global audience of people eager to discover their next favorite business.” As the Covid-19 accelerates changes in the business landscape, he emphasized firms should be able to constantly innovate and predict changing trends in the next three to five years to prepare themselves to meet the new demands. By Choi Mira[Photo by Kim Jae-hoon][ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]
2020.09.21
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WKF: Covid-19, Economy to Be Make-Break Point in US Election: Priebus
The American verdict on Covid-19 and economic management would make or break the chances of U.S. President Donald Trump extending his term after the November election, said his former campaign strategist and chief of staff Reince Priebus who had been credited for putting the business mogul into the White House four years ago. “Who can handle the coronavirus and who can deal with the economy afterwards would decide (the election results) by a mile,” Priebus said as he joined to a virtual session at the World Knowledge Forum in Seoul to assess the four years in Trump administration and the outlook on the upcoming U.S. presidential election. “As far as achievements go, from the perspective of policies and substances, the president (Trump) should walk away with the election,” he said, although he admitted the race would be a “close” one. Despite his short six-month tenure in the White House, Priebus stayed loyal to Trump and approved of his “fiery” style that had made things done – strengthening the economy through tax cuts, spending, and deregulations (until the COVID-19 fallout), bringing troops home, crushing terrorist organizations and getting answers to the global threats – China and North Korea. He found the Democrat presidential candidate Joe Biden campaign too week as it focuses its offensive entirely on “style” of Trump, not policies and substances. He did not think “Americans would want to return to normal” by choosing Biden as “people want to continue fighting, breaking plates and dishes in Washington.” He predicted Trump to “double down or triple down” on China and “America First” policy once he wins a second term. “He would likely do more to get us out WTO, increase pressure on China and not be as subtle in the first phase deal with China if he gets re-elected,” he said. He also projected one of the first things Trump would do after earning another four years in office would be meeting with North Korean leader Kim Jong-un “to get some kind of incremental concession to show goodwill to the region.” But he went to advise his boss to seek “more balance in law and order and racial harmony.” By Hye-seung Seo[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]
2020.09.21
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