This study seeks to compare the components of import in the countries of South Korea, Taiwan, and Japan, and examine the level of import dependency in each country to identify how each country utilizes and distributes its given resources.
In the face of globalization, an understanding of the international economy is essential. Society’s general perception of trade is that more export and less import is better. This however, is not always true, as imports do not always bring negative consequences. A reason for goods being imported may be that the good is not produced within the country or that it may cost too much to produce it locally despite local production capability. In this context, imports actually work to distribute resources for goods or services that have a high production cost in the domestic market. Therefore, the import of goods or services plays a crucial impact on the distribution of available resources locally.
This study conducts a comparison and analysis between South Korea, Taiwan, and Japan on the items of import and the import dependency of each country in an aim to examine how each country utilizes imports and distributes resources. In terms of import dependency in domestic demand, Taiwan showed the highest level of dependency, followed by Korea, and then Japan. Taiwan also showed the highest level of distribution for export production, also followed by Korea and then Japan. From Korea’s standpoint, Taiwan is reducing domestic production by increasing its import dependency for domestic consumption, deploying the reduced resources for export production. Japan on the other hand, is reducing export production and utilizing the saved resources saved for domestic production and consumption.
The main factor making Korea’s dependence on exports lower than that of Taiwan is the high trade barrier on imported consumer goods. Among the goods consumed locally, the amount of consumed goods not produced locally is 4.5% in Korea, 6.2% in Japan, and 26.9% in Taiwan. In the case of agricultural products, Korea showed 2.4%, Japan 6.4%, and Taiwan 8.5% of goods consumed but not produced locally. As shown in the figures, Korea’s trade policies not only impose different levels of import restrictions according to industries, but also differentiate the products according to their purpose–direct consumption or utilization as an intermediate good.
Looking from the aspect of import dependency and resource utilization, Taiwan’s model seems to be more appropriate for Korea than Japan’s. Both exports and imports are expected to decrease should Korea follow Japan’s model; but should Korea follow Taiwan’s model instead, Korea is expected to increase both exports and imports. From the perspective of consumer goods, eliminating trade barriers to allow more dependence on imports is seen as the wiser policy to pursue.
한 대 일의 수입의존과 자원 활용(Study on the import dependency and resource utilization conditions of Korea-Taiwan-Japan)
|Series Title; No||정책포럼 / 제78호(9506)|
|Subject||Economy < Trade|
|Holding||KDI; KDI School|