Crisis? South Korea has barely experienced one. On 28 November, the JoongAng Daily, one of South Korea's three English-language dailies, reported the forecasts of Moody's Economy.com: +6 % growth forecast for 2010. "With the exception of the last quarter of 2008, when negative growth of -5.1 % was recorded, Korea has hardly been affected," explains Clément Charles, Director of Publications at FKCCI, the French-Korean Chamber of Commerce and Industry. "In the third quarter of 2009, the needle rose to 3.2 %, the highest score in seven and a half years", he adds.
Even the luxury goods market is doing well in the Land of the Morning Calm. A real feat: sales of 1.7 billion euros in 2008 and growth of 35 % in the first quarter. In all this, the French have the lion's share, with 50 % of the market and a very special place for cosmetics (1). In fact - an anecdote that will make even the most coquettish of Western women shudder - a well-off Korean woman uses no fewer than 17 beauty products a day. As a result, the Korean beauty cream market is in third place, after the United States and Japan.
South Korea owes this luxury boom in the middle of a crisis partly to the devaluation of the won against foreign currencies. Japanese and Chinese tourists, attracted by the multitude of duty-free shops springing up in the capital's high streets (and not just in the airports), are flocking to Seoul to do their shopping. The double effect: the country is one of the few to have seen an increase in tourism during the crisis (2). So if the forecasts for 2010 seem rather optimistic, it's also because South Korea has already risen to a real challenge: achieving a surplus of almost $27 billion (3.4 % of GDP), the largest in its history, over the first eight months of 2009. And this despite the 2008 deficit. All of this was orchestrated by four main industrial sectors, which accounted for nearly 57 % of its exports (3).
Free trade with Europe
"South Korea can no longer be described as an emerging country," insists Katarzyna Goyon, Director of the FKCCI, pointing out that it was the only OECD country to record growth in 2009. This may also be one of the reasons why some well-informed entrepreneurs choose to set up in Seoul rather than Beijing or Shanghai. "Not only does South Korea represent a good base from which to attack China and Japan, but the recent free trade agreement signed with the European Union on 15 October should make things even easier, thanks in particular to the lifting of customs duties on European exports", adds Katarzyna Goyon (4).
According to forecasts, this agreement could generate up to €19 billion in new trade with the European Union, which is the second most important destination for South Korean exports, after China. Korea ranks eighth among Europe's trading partners, with France as its 18th supplier, 29th customer and fourth European partner. "Nearly 80 % of successful foreign companies in South Korea have a local partner", explains Katarzyna Goyon. Another crucial factor is that Korea is one of the most popular countries in the world to create a website," she adds, "but beware, Facebook or Google are marginal and are being redesigned in local versions. So it's Naver, the most common search engine, that you need to turn to, while taking care with your image.
After all, it was not for nothing that Seoul was selected as the first World Design Capital in 2010. Samsung, LG, Daewoo and Hyundai now win all the world's major design competitions, while Seoul has made huge efforts to improve its environment and redesign its face. It all began with the demolition in 2003 of the Cheonggyecheon autobridge, a symbol of Korean development in the 1960s, which brought back to life a watercourse that now brings life to the city hall district.
Design and green growth
Since then, there has been one new development after another: new street furniture, more accessible banks along the Han River, a green growth plan including parks and cycle paths, and two gigantic development projects in the International Business District. The Yongsan project, with its three towers of over 100 storeys planned for 2024. And the Songdo Global Business Hub, a new ecological city built near Incheon airport. "The title of Design Capital will give the city a new image, a brand name", says Jenny Ryu, spokesperson for the Seoul Design Foundation. Its future symbol, the Dongdaemun Design Plaza & Park, will be a "design hub", a place for exhibitions, conferences and relaxation.
Initially planned for 2010, this former baseball stadium redesigned by the famous architect Zaha Hadid will not be ready until 2011. "The delay was caused by archaeological discoveries," continues Jenny Ryu, "but the Seoul Design Capital is not something that has to be 'completed' by 2010. On the contrary, it's a long-term journey, a process for the future." A future that Seoulites are looking to with confidence, and above all with style.
(1) Figures provided by the Economic Department of the French Embassy in Seoul.
(2) More than 7 million visitors registered on 23 November 2009, with a target of 10 million by 2012 and 20 million by 2020.
(3) Electrical and electronic equipment (24.1 %), shipyards (13.5 %), nuclear reactors, machinery, boilers (10.3 %), automotive (9.3 %).
(4) Scheduled to come into force in the second half of 2010.
