This study examines the import structures and the levels of import dependency in Korea, Taiwan and Japan, comparing the three countries in terms of how well they are making use of imports in order to find the relevant implications for the future of Korea’s economic policy. In Korea, the prevailing view regarding the level of import dependency is that lower is better. This is in part due to the belief that Korea ought to emulate the economic experience and example of Japan, a country that boasts a particularly low level of import dependency. However, Japan possesses a much larger economy than Korea and it has different comparative advantages. It would therefore be problematic for Korea to emulate Japan’s example unthinkingly. On the other hand, Taiwan, with such a high level of import dependency, is also the country in the world with the greatest trade surplus. Taiwan therefore provides a good counter example to the belief that a lower import dependency is necessarily better.
Some may still insist that, everything else being equal, it would be better for Korea to lower its dependency on imports. However, attempts to lower the import dependency without improving productivity will undermine the vitality and growth of the Korean economy in the long run. Most importantly, any change in import dependency will in turn trigger changes in other related factors and conditions. Taiwan, on the other hand, provides an example of how increasing import dependency can improve the efficiency of resources in a given country. While Taiwan and Korea differ very little on the ratio of export-oriented domestic output, Taiwan invests a greater ratio of its domestic resources in export-oriented production. It does so by saving resources on the domestic market and redirecting them toward production. The simultaneous growth of imports and exports has helped to revitalize the Taiwanese economy and sustain the country’s economic growth.
The case of Taiwan leads us to revisit our belief that a lower import dependency is necessarily better. Rather, Taiwan’s experience convinces us of the futility—and possible repercussions—of trying to curb the spontaneously rising import dependency. To improve its economy, Korea needs to open up its market phase by phase, not under the pressure of international norms or practices.
한 대 일의 수입의존구조 비교(Korea vs. Taiwan vs. Japan: Structure of Import Dependency)
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Trade|
|Holding||KDI; KDI School|