China's Economic Challenges: Lessons from South Korea's Growth

China risks economic stagnation by neglecting to learn from South Korea's successful growth model.

### Lessons from South Korea: A Wake-Up Call for China and Southeast Asia
* 📰 A recent article by a Hong Kong media outlet has sparked significant debate in China, claiming that the government is **not learning from South Korea** and is instead heading towards **economic disaster**.
* 📉 The South China Morning Post highlighted that China and Southeast Asian nations are **trapped in a middle-income trap**, warning that ignoring South Korea's growth model could lead to **dire consequences akin to the late Qing Dynasty**.
* 🌍 The World Bank's Global Development Report emphasizes that transitioning from middle-income to high-income status is challenging, requiring not just **high investment** but also **technology imports and innovation**.
* 📊 Despite many countries reaching upper-middle-income levels, they struggle to **close the income gap with developed nations**, with the report serving as a **critical reminder for China to restore confidence and productivity**.
* 🏭 The media praises South Korea's successful transition to a **high-income country**, achieved through **land reform and export-oriented industrial policies**, contrasting it with China's nationalization policies that **stifled agricultural motivation**.
* 🚀 South Korea's focus on **high-value exports and cultural industries**, such as K-pop, has bolstered its economy, while China and Southeast Asia continue to rely on **cheap labor and primary industries**, risking stagnation.
* 📈 Ultimately, the Hong Kong media asserts that to avoid becoming a **hollow echo of advanced nations**, China and Southeast Asia must learn from South Korea's unique economic strategies and **embrace innovation**.

"아시아에서 유일한 한국인을 안 따라 배운다고?!" 홍콩매체가 위험을 무릎쓰고 중국경제 비판하는 사상초유 특집보도 내놓자 궁지몰린 시진핑 주석

구네스북

China's Struggle with the Middle-Income Trap

A Hong Kong media article claims China's government is taking an opposite path to South Korea, driving its economy toward catastrophe.

The South China Morning Post suggests that China and Southeast Asian countries can rise as advanced nations by learning from South Korea, warning of a challenging transition from middle-income to high-income status.

The World Bank's Global Development Report highlights the difficulty of progressing from middle-income to high-income, emphasizing the need for technology import and innovation, while urging the Chinese government to address these challenges.

Korea was the last country to successfully join the ranks of advanced economies in Asia, achieving this transition from middle-income to high-income status in the early 1990s.

The Hong Kong media highlights the absurdity of past predictions about the rise of Asia, particularly in light of China's economic growth.

Key factors in Korea's success included export-oriented industrialization, technology learning, and a significant land reform in 1949 that reduced income inequality and incentivized rice production for tenant farmers.

The Role of Consumerism and Manufacturing in Korea's Economic Development

Transforming into consumers has been crucial for Korea's economic growth, with Hyundai's Pony model targeting farmers.

In contrast, China's nationalization of land post-1949 demotivated farmers and hindered its economic progress.

South Korea's success in transitioning to a high-income country was driven by export-oriented manufacturing and government investment in heavy industries, contrasting with China's focus on real estate development.

Korean banks provided unlimited discounted loans to exporters, enabling loan repayment through continued exports.

The government's focus on nurturing heavy and chemical industries improved real incomes and created high-productivity manufacturing jobs, driving record-breaking economic growth.

Korea's advanced manufacturing industry thrived during the 1997 IMF financial crisis, and the sharp depreciation of the won allowed manufacturers to recover rapidly through exports, while cultural exports like K-pop and Korean dramas also boosted the economy and enhanced Korea's international image.

South Korea has successfully created an unmatched global economy in Asia through agricultural development, export-oriented manufacturing, and flourishing cultural industries.

In contrast, China and Southeast Asian countries are relying on cheap labor and primary industries, which may hinder their progress to advanced country status.

The Hong Kong media report emphasizes the belief that, despite challenges, these countries can also achieve remarkable economic development.