Korea's Economic Growth Opportunities

Korea's Economic Growth Opportunities

When the Korean economy followed Japan, the Korean economy grew strongly thanks to the strong Japanese yen and gained trade competitiveness.

The main competitor of the current Korean economy is China, not Japan.

Therefore, if China's yuan strengthens in the future, the Korean economy gains trade competitiveness and gains an environment for further growth.

China seems to have been struggling to maintain the yuan's decline in order to maintain its trade competitiveness while the Japanese yen is weakening. Moreover, China, which still maintains prices close to deflation, does not have many factors to induce the yuan to strengthen.

However, as the yen strengthens, the reason for holding the yuan to a relative weakness disappears, and as the Chinese economy recovers, if the price of imported raw materials rises, China will inevitably allow the yuan to strengthen. On top of that, when the Chinese economy recovers and the yuan moves strongly, foreign capital's investment in China could increase, accelerating the yuan's strength.

When this happens, the Korean economy will once again face an extraordinary environment.