1. South Korea
1.1 A Profile of Economic Development in South Korea
Republic of Korea lies in the south of South Korean Peninsular, it is near the Democratic People's Republic of South Korea across "the three eight line". Its area is 99.3 thousand sq km, with south-north length about 500 km and east-west width about 250 km. If faces the Sea of Japan to the East and the Yellow Seas to the west. The southeastern part faces with Japan across the sea. The geographical features of South Korea are more mountainous region and less plain. The coastline is long and tortuous. South Korea's climate comprises four distinct seasons and is warm and humid. By the end of November 2000, the total population of South Korea is 46.12 million. The capital is Seoul. There is one special metropolis (Seoul). Six cities (Pusan-si, Taegu-si, Iinchon-si, Kwangju-si, Uulsan-si), nine do (Kyonggi-do, Kang Wdo, Ch ungch ong-bukdo, Ch ungch ong-nando, Cholla-bugdo, Cholla-Namdo, Kyongsang-bukdo, Kyongsan nam-do, Cheju-do). The total coastline length is 52.59 thousand kilometers; the main ports are Pusan, Inch on Pohang Ulsan, Kwang-ju, etc.
In 2000, the GDP growth ratio reached 10.7% in South Korea; the GDP value was US$ 406.7 billion, ranking the thirteenth in the world. National income per capita was US$ 8581, ranking the thirty-seventh in the world. Import and export volume of foreign trade was US$ 333 billion, ranking the thirteenth in the world. The foreign-oriented strategy of economic development leading by the government was carried out in South Korea, its economy developed rapidly from the 1960's, with the high growth ratio over 9% sustained more than 30 years. In 1995, the national income per capita topped US$ 10 thousand. In 1996, South Korea entered the Organization of Economic Cooperation and Development (OECD) which is called Developed Countries Club, with one foot entered into the threshed of developed countries. The finance crisis erupted in the end of 1997 made the economy in South Korea substantially retrogress. Affected by the finance crisis, the growth ratio of South Korean economy declined a lot to -6.7% in 1998, GDP value and GDP per capita declined sharply as compared with that of the preceding year. But the economy in South Korea has revived with the aid of the International Monetary Fund and the country's own structure adjustment. The pillar industries in South Korea included semi-conductor, automobile, ship building, iron and steel, electron, construction, petrochemical industry, information and communications, textile, etc. Now South Korea is greatly developing the knowledge, high additional cost industry such as information and communications, biology and new material, new energy etc. The economy in South Korea laid a particular stress on big enterprise groups, the four largest enterprise groups Hyundai, Samsung, LG and SK have occupied a decisive position in the national economy in South Korea. However, currently the South Korea government implements the policy of encouraging the development of medium and small-scale and high-tech risk ventures. As indicated in the following Table, the economic strength of South Korea is in a stable ranking.

The main production sectors in South Korea include iron and steel, automobile, shipbuilding, electron, chemistry and textile, etc. In 2000, South Korea received purchase orders of shipbuilding, amounting 20.79 million sons and ranking the first in the world, which was 45.1% of the total amount in the world. The iron and steel output was 43.10 million tons, ranking the sixth in the world, Pohang Iron & Steel Co., Ltd. In South Korea is the second largest iron and steel complex in the world. The automobile output was 2.843 million in 1999, ranking the seventh in the world. The electronic industry products are mainly characterized with high technology and intensiveness, South Korea is one of the ten largest electronic industry countries, with semi-conductor integrate circuits developed particular rapidly. The tourism in South Korea is well developed. The foreign tourists in South Korea in 1999 was 4.66 million, the foreign currency revenue of tourism was US$5.7 billion. The main tour services and facilities are as follows; there are 42 restaurants that meet the international standard requirements, some of which have been in the list of the series of international restaurant reservations.
The foreign trade in South Korea is mainly within the Asia-Pacific regions. In 2000, the total volume of import and export was US$ 333 billion, among which the import volume was US$ 160.4 billion, the export volume US$ 172.6 billion. South Korea has economic and trade relationship with more than 180 countries and regions in the world, among which the United States, Japan, China, South-East Asia are the main trade partner of South Korea.

The main import products are crude oil, coke, cotton wool, aluminum, log, chemical pulping, etc. the main export products are of electron, textile, iron and steel, chemical industry, automobile, ship and machinery. In the field of foreign investments, the value that South Korea directly invested to overseas was US$ 4.04 billion in 1999. The capitals opening to foreign countries in South Korea speeded up evidently. In the 1960's and the 1970's, the investments in South Korea made by foreign countries were only a small part of capitals entry in South Korea. From the 1980's, South Korea gradually relaxed the restrictions of foreign investments, so the foreign investments in South Korea gradually relaxed the restrictions of foreign investments, so the foreign investments in South Korea increased. But, as compared with the South Korea's economic scale, the investments were still relatively low. After the finance crisis broke out, South Korea made much more efforts in attracting foreign investments. In 1998, the direct foreign investment value in South Korea was US$ 8.85 billion. In 1999, the volume reached US$ 15.54 billion. And in 2000, US$ 15.6 billion, which created new records in history in successive years. The total external debt value was US$ 129.2 billion up to the end of April, 2001, among which short term external debt was US$ 42.7 billion.
The electronic information industry has played a great role in restoring the economy in South Korea. In 1999, the GDP value increased by 10.7% compared with that of the preceding year, the electronic information industry increased by 41.1%, it had as high as 4.1 percent contribution among total GDP growth an important role in balancing international income and expenses. In 1999, the total export increased by 16.3% as compared with that of the preceding year, the export on electronic information products was increased by 49.8%, which accounted for 82% among the total export growth volume.
1.2 The Development Status and Trend on Communication Industry in South Korea

1.2 The Development Status and Trend on Communication Industry in South Korea
The South Korean government attached great importance to communication industry, it has taken a series of new policies and methods to push the communication industry to develop in the advanced direction, and has achieved great progress attracting worldwide attention, a great upsurge in communications. According to Industrial Prospect in Korea 2000-2001 issues by Korea Institute of Industry Research, the export growth ratio in South Korea will reach 11%, a better prospect. By the end of 2000, the value of output of communications had reached W 1 6.5 billion, with the export volume US$ 8.96 billion. The output value will reach W 18.9 billion, an increase by 14.2% compared with that of the last year. The export volume reached US$ 11.14 billion, an increase by 24.3% compared with that of preceding year.
As also predicted in the report, in 2002, South Korea will increase the export in three kinds of electronic industries such as computers, household appliances, and semi-conductors. The export volume of computers will reach US$ 16.67 billion, an increase of 12.45 than that of last year.
1.2.1 An evaluation on communication infrastructure in South Korea
The following groups of data show that the communication infrastructure construction in South Korea has made great achievements: PC popularization ratio has approached to one-quarter: the Internet users in South Korea were 140 thousand in 1994, and the number increased as high as 16.4 million by August, 2000. The net popularization ratio exceeded one-third. Mobile telephone users amounted to 26 million, 555 of the whole population, which surpassed 45% the popularization ratio of fixed telephone users. The mobile phones manufactured by South Korea all have the net surfing function since 1999, currently the wireless Internet users amounted to 12.19 million. It is expected that all mobile-phone users can surf the net wirelessly to next year.
At the same time, South Korea made out the plan to construct national super high-speed information and communication net in the year 1993. Now the main net comprise by high-speed fiber cable is through, and the high-speed fiber cable main net in all areas in the country will be established in the year 2002. At that time, the transmitting, speed of the whole Internet information will increase 100 times as compared with that of 1998. In July 2001, super high-speed information and communication net users over passed 2.66 million, 22.7% of all families in South Korea. By June 2001, 60% percent of people in South Korea have already used the advance methods such as ADSL, Cable MODEM and specified line to surf on the line only about 38% people are still using MODEM. However, people using MODEM in November, 2000 reached as high as 86%. This means South Korea has already been one of the world-leading wideband Internet markets in the world. The following forms and figures show the construction status of the communication infrastructures in recent years in detail.

Jan. 3,100,000 6.7 National Computerization Agency
19981997 Nov.Feb. 1,800,000700,000 3.91.53 IDC Asia-PacificInet, Inc
Source: Yearbook of China Information 2002

1.2.2 Crisscross communication networks in South Korea
(1) Overall modification of communication networks
In 1997, the optic fiber cables took place of the original copper wirings in the building-up of the networks connecting 237 telephone offices in South Korea. In addition, the high-speed synchronous fiber transmission network equipment replaced the low-speed synchronous transmission equipment.
This fiber networks has connected 524 users among the busy communication regions and 1855 mansions with busy communication services. In addition, the technicians modified the existed copper wirings to DSL of the high data speed, which are used for making connections to over 20 thousands of users among the areas where the optic fiber cables couldn't be paved temporarily. By increasing speed of NKN-G and extending its coverage, adding the quantity of network junctions and access points, the cost of information transmission services is expected to declined to the price level of local telephone services. Eventually, these junctions and access point will comprehensively connect the local telephone offices, under which there are now 144 cities in South Korea linked together. The South Korea government has been encouraging the private enterprises to invest on the projects of building advanced user networks. However, their capacity of investment of such projects has been weaken sharply due to the economic situation in South Korea.
Therefore, in order to make full use of the established trunk networks of information transmission, the government is considering making investments on the building of high-speed user information networks, which will include the optical cables, xDSL lines and wireless communication lines, providing service for colleges and the public sections at all levels.
South Korea is planning to build up an efficient mixed network, which will include xDSL, wideband wireless, telecommunications, satellite and cable TV net. A ll network systems can be connected flexibly to satisfy the requirements raised by economies of scale and developing demands.
Correspondently, in order to meet the constantly increased demand on high-speed services, the efforts shall be directed on paving the optical fiber cables, building transmission networks, and linking the existing local telephone offices. During this period, the offices and domestic users located in the region with busy communication services shall be linked at first and the existed telephone lines shall be modified so as to connect some users who have relative low demands for the wiring services. By the year 2002, the amount of users connecting xDSL networks is expected to reach 3.5 million. Among the regions that are difficult to build the user's lines, the wireless networks shall be established; among the regions that need busy services and located with major public sections, two kinds of transmission networks, wired and wireless, can be connected with the national information infrastructures. By the year 2002, the amount of wireless users is expected to reach 300 thousands.
(2) Building of super high-speed information communication networks
Early in 1993, the South Korean government planned to establish the state super high-speed information communication networks. At present, the trunk network equipped with high-speed optical fiber cables has opened in 107 regions, and is expected to open in all regions in the whole country by the year 2002. To that time, the transmission speed of Internet information will increase by 100 times higher than 1998. In terms of terminal users, the amount of super high-speed information communication users has exceeded 1.5 million in May 2000, accounting for about 12.5% of the total amount of families in the whole country. By June 2000, 60% network users in South Korea have made use of advanced methods e.g. ADSL, cable, MODEM and specific line to enter the net, and only 30% of that still used MODEM, whereas 86% of network users entered to Internet by the use of MODEM in December. 1999. It means that South Korea has become on of the leading wideband Internet market in the world. In order to speed up the building of information infrastructure and to complete the fundamental frame for network economy as soon as possible, the South Korean government intends to invest W 40 trillion since the year 2000. Up to the year 2005, the super high-speed information communication networks will be completed around the country. At that time, the family users can share 10 Mbps of bandwidth and the personal mobile users 2Mbps of bandwidth. People can enjoy the high-quality multi-media information services with less charge anywhere and anytime. This new target will be realized 5 years earlier than the original timetable, highly promoting the development of e-commerce in South Korea.
By the end 1999, South Korea has established the super high-speed communication networks in 107 regions, equipped the main cities with super high-speed exchangers, laid more than 80000 km long of optical fiber cables all over the country, and had 600 thousands families involved in the high speed information communications.
To promote the open competition of communication industry, the Ministry of Information and Communications in South Korea made a decision to select 3 carriers to run IMT-2000. Either the original carriers or the new one can apply for biding and take part in the fair competition. The final selected 3 operators only need to pay W trillion (1.3 trillion (being about equal to US$ 900 million to US$ 117 million) for their business licenses. In the future, 2 GHz IMT-2000 mode of communications will be adopted. Among these three carriers, two of them will use the synchronous IMT-2000 (cdma 2000) and the third will use the asynchronous IMT-2000 (W-CDMA) under the agreed technical criteria. At present, several competitive communication companies are managing to get united to enhance the integrate competition for obtaining the business license.
(3) Actively import the advanced foreign communication technologies and equipment
Since 2000, South Korea has adopted vigorous measures to import the advance communication technologies and equipment. As the latest wideband ISP, ATM main exchangers produced by morconi Communications Co., was imported, which is used as the first ISP for providing the video request service in South Korean market. More than 50 backbone exchangers were used during the establishment of high-speed multi-media communication network by SuperNet.
After the performance of serious selection and extensive basic testing, morconi Communication Co.'s product-ATM Main Exchanger was selected by the South Korea's Communication sector. The joint venture of morconi communication Co. in South Korea developed ASX-1000 exchanger for the state main networks that link with the capital-Seoul and other major cities. Through these advanced high speed networks, SuperNet will provide the services of Internet video request service, which including two-way chatting services and the other Internet services using ADSL. After entering the South Korean wideband market, in order to make further improvement on the quality of service, morconi Communication Co. signed a contract with ThruNNet, which is the provider of advanced high speed internet services in South Korea, for supplying Osiris SDH wideband access multiplexing facilities.
1.2.3 Status of mobile communication market in South Korea
In accordance with the reportage by South Korea's media, the business income of three mobile carrier, SK Telecom, KTF and LG Telecom, reached W 14.8505 trillions (being about equal to US$ 11.233 billion) for the last year, an increase of 25.7% over the year 2002. Its net profits reached W 1.8467 trillion (being about equal to US$ 1.379 billion), increased by a large margin that is 177.8% increase over the last year.
(1) Factors for outstanding achievements
The sustained increase of mobile phone users; an increase of tariff; an increase of business abolition of mobile phone subsidy; the reduction of cost for sales
(2) SK Telecom
The regular profits reached W 1.7614 trillion (being about equal to US$ 1.332 billion) for the last year, an increase of 29.4% over the year 2000. Its business income reached W 6.2271 trillion (being about equal to US$ 4.71 billion) and the net profits reached W 1.1403 trillion (being about equal to US$ 0.863 billion), increased by 8.1% and 20% over the year 2000 respectively. In addition, for SK New Century Telecom, which was merged into SK Telecom on 12th of the last mouth, its business incomes reached W 2.007 trillion (being about equal to US$ 1.518 billion) for the last year, Its gross profits reached W 254 billion (being about equal to US$ 0.192 billion) and its net profits reached W 0.119 billion (being about equal to US$90. 015 millions). By adding the income of SK New Century Telecom, the business income of SK Telecom reached W 8.2341 trillion (being about equal to US$ 6.229 billion) and the net profits reached W 1.2593 trillion (being about equal to US$ 0.953 billion) for the last year.
(3) KT Freetel
The net profits for the last year reached a highest level, which was W 433 billion (being about equal to US$ 0.328 billion), a noticeable increase of 273% over the year 2000. It fully offsets the accumulated loss since 1997. Its business profits reached W 4.4946 trillion (being about equal to US$ 3.4 billion) and its business profits reached W 0.7455 trillion (being about equal to US$ 0.564 billion), increased by 62% and 197% over the year 2000 respectively.
(4) LG Telecom
Last year, the pet profits reached W 0.1544 trillion (being about equal to US$ 0.117 billion), which was the first time to turn loss into gain since its establishment in 1996. Its business incomes reached W 2.1218 trillion (being about equal to US$1.605 billion), an increase of 14.6%, compared with the business incomes of the year 2000 that up to W 1.851 trillion (being about equal to US$ 1.4 billion).
1.2.4 Status of controlling for the telecom market in South Korea
The Ministry of Information and Communication is responsible for the controlling and drawing up of policies concerning the telecommunication market in South Korea. The major based law documents including: Law of Wireless Wave Controlling, Basic Law of Telecommunication, Law of Communication Business and Basic Law of Developing Information. The details are shown in the table below.

In accordance with the above table, for all the telecom businesses, not only the fixed telephone services and the mobile phone services, but also the data transmission, telegram and leased line services, the carriers have to apply for the licenses in South Korea. However, the license issuing services is free of charge provided the company has the acceptable qualification. And there is no time limit for license use so long as the company gets the approval for telecom operation. The license issuing, except that of cable TV business, shall be taken care by the Ministry of Information Communications.

1.3 An Analysis on the Electronic Product Market in South Korea
1.3.1 General analysis on the electronic product market in South Korea
In the light of the calculation in Yearbook of World Electronic Data 2001, South Korea's gross output value of electronic products in 2000 reached US$ 67.3 billion and the proportion of output value for investment products, consumer products and element is 38.1:6.9:55.
In 1999, South Korea had an output value of electronic information products of US$ 46.929 billion, a 19% growth more than that in the year 1998, and took the second place in Asia, next to Japan, in terms of its output value of electronic information products (exclude that of China), accounting for 12%. In 2000, South Korea, with its output value of electronic information products accounting for US$53.429 BILLION, A 14% growth more than that in the year 1999, took the second place in Asia in terms of its output value of electronic and information products, accounting for 12%.
South Korea's market scale of electronics takes the second place in Asia as well. In 2000, South Korea's market scale electronics reached US$ 25.375 billion, a 16% growth more than that in 1999, accounting for 10% market scale of electronics in Asia (exclude that of China). In 2001, its market scale of electronics reached US$ 27.796 billion, an increase of 105 more than that in 1999, accounting for 10% market scale of electronics in Asia.
1.3.2 Sales scale, development characteristics and growth potentialities of electronic information products
Semiconductors, the main power affecting the South Korea's economies, have performed well in the last decade. South Korea, the third major producers of semiconductors in the world, has more than 100 semiconductor-related domestic sectors. In 2000, South Korea had an output value of US$ 32 billion in its semiconductors. Semiconductors Are the main exporting products in South Korea, among which 80% are accounted for DRAM chips. The total amount of export products reached high up to US$ 13 billion in 1995, and declined to US$ 5.9 billion in 2000 due to the global economic depression. Three South Korean companies, Sumsung Electronic, Hyundai Electronic. LG Semiconductor, supplied 20% of DEAM in the world.
In South Korea, there are four leading groups of electronic producers-LG Electronic, Sumsung Electronic, Dawoo corporation, Hyundai Electronic, and there are more than 100 medium-scale companies and thousands of small-scale companies with less than 300 employees.
At present, there are about 60 thousands of technicians engaged in the software development in South Korea. In 1999, the output value of software products reached W 5.2096 trillion (being about equal to US$ 4.38 billion). In the South Korea's software market, the leading businesses are computer services and software set, which occupy 65.9% and 32.4% respectively, and 98.3% totally, in the whole software market. Over the past years, South Korea's game software has been developing rapidly to the most flourishing software products. South Korea has owned the most advanced apparatus for making three-dimensional cartoon. The South Korean government paid much attention to the software industry. At the beginning 2001, it worked out the investment draft for the software production with the target to take the seventh place in the world in terms of software industries till the year 2005.
During 1999 and 2000, the output value of audio and video products is maintained a 2-digit growth, accounting for US$ 4.674 billion. On this market, the leading products are color TV, videorecorder and VCD player, which account for 70.9% of its output value.
1.3.3 Production and market status of main electronics in the recent years in South Korea
See the following Table
1.4 Development of Information Production in South Korea
1.4.1 Comprehensive program for South Korea's high-tech industries
South Korean government has set the target of becoming the advanced country at the beginning of the 21st century, and has worked out Fifth Five Year Plan of Scientific and Technological Innovation 1997-2002 (briefly called Plan), which has been inplemented until now. In 2000, this Plan was put into discussion, revise and perfected due to the big change occurred inside and outside environment of science technology. In the revised Plan, the supporting emphasis is laid on promoting intensive knowledge. To enrich the subject facing the 21st century knowledge based society by adding the description for accelerating the informatization; the relating state research and development Plan is added to realize Long Term Blueprint of Science and Technology Facing 2025 (in briefly Blueprint); the detailed actions and relating policies were added for the development of the local science and technology. The total amount of investment for the Plan is up to W 8.7864 trillion (being about equal to US$ 6.9 billion). The target of revised Plan is summarized as: by 2002, to form the creative technological innovation power in the state strategic core, to establish innovation mechanism of science and technology driving the knowledge based society of the 21st century.
In the light of the Blueprint, South Korea's comprehensive ability of science and technology is expected to rank among the major powers in the world by 2010 and then to rank among the seven major powers by 2025. In order to realize this target, the detailed practicable program needs to be worked out by 2002 and the technological innovation foundation aiming at becoming advanced power needs to be established. The detailed program is:
(1) The investment shall be centered on the competitive special technologies and the strategic technologies that are mainly developed by the State, realizing the globalization and the first class for the special technologies.
(2) To activate the research mechanism in universities and to master the basic techniques and future source technique and to establish the environment suitable for the intensive enterprises only.
(3) To break out the research limits that existed among the old research body, technical divisions, regions and the countries, promoting the overall research and development.
(4) To make full use of the limited source of research and development through performing the reasonable division of label between the government and nongovernment, so as to enhance the investment benefits of the state research and development.
If the plan ampleted smoothly, South Korea shall obtain the creative technological innovation ability in terms of the strategic core sectors such as the information communications, automobile, machinery, life science and new materials, etc. which are leading powers for the economy development Among the above sectors, South Korea is expected to rank among the five major technical powers in the world. Meanwhile, the technological innovation abilities among the public technology fields such as health, welfare, social infrastructure, agriculture, national defense, sea aquatic, farming, forestry and environment, etc. are expected to be enhanced greatly and be achieved the level of advanced country. By activating the research mechanism of universities, a large number of talents who will drive the technical innovation shall be trained, which resulted in the changing direction of growth from emphasis on the quantity of large-scale enterprises to focus on the quality of technology, and the noticeable improvement on the technical innovation ability of mid-scale and small-scale enterprises. By owning the advanced research equipment and apparatus, the science and technology infrastructure that can provide information in any time will be expanded so as to obviously improve the research efficiency, to systematically the support local technological development, to balanced the land exploitage, and to realize the high-level of the local industrial structure.
1.4.2 Summary of South Korean information industrial development
As the major power of electronics production in Asia, in the financial crisis of 1997, South Korea's information industries suffered a heavy blow, and then have been recovered gradually since 1999. In recent years, the South Korean government paid more attention on the information industries. South Korea is under the trasforation from the traditional industrialized society to the informatized. On The South Korean government, with the conception of e-Korea, intends to invest W 738.5 billion into the information technology industries. In order to promote the development of its industries, South Korea has worked out a long-term strategy.
The first phase (up to the year 2005): to complete the infrastructure of information communications; to strengthen the basis of information industries such as the technical development for the strategic information equipment, etc.
The second phase (up to the year 2010): to obtain the leading high-tech product with competitive capability in the world through developing first class products.
The third phase (up to the year 2025): to develop the high-tech products that occupied the world market firstly by the ambination of new technologies and multi-media techniques.
Aimed at supporting the development of information technologies and information industries, the majon research and development projects decided by the South Korean government are: new-generation technique of communication networks, intelligent multi-media technology, human friendly information processing technology, information protection and security technology, future computer technique, portable multi-media terminal technology, super high-speed wireless data processing communication technology, next generation super integrated semiconductor technology, ICT core elements as well as parts development and three-dimensional image processing technology.
Too summarize, South Koreans information industries have made noticeable achievements in the development of the national economy and have paled an important role in the national economy. The total output value of South Korea's information industries raised from US$ 58.1 billion in 1997 to US$ 109.9 billion in 2000, with an annual growth rate of 24.3% from 1996 to 2000, in which 17.9% of IT services sectors, 25.8% of manufacture sectors and 31.1% of software and the other sectors. High growth is tending to continue. The proportion of IT in GDP is increasing year by year, which is raised from 8.6% in 1997 to 12.3% in 2000. The contribution rate of IT to the economic growth raised from 4.5% in 1990 to 50.5% in 2000, that means half of the growth rate of economy attributed to the IT sectors.
1.4.3 Development features and trends of main products
The level of informalization is high in South Korea. The owing volume per hundred people in the year 1999 is 18 sets in computers, 43.8 sets in fixed telephone and 44 telephone lines. In accordance with White Book of South Korea's State Informatization 2001, the informatization level took the seventeenth place among the same level of developed countries in the year 2000. Playing an important role in South Korea, the information industry's output value reached 14.5% of GDP. The communication and semiconductor industries are the backbone in the South Korea's information industries.
As one of major export country of electronics, South Korea has a 29% share of information products in the total exports volume. Among the exporting products of electronics, the household appliances such as TV and microwave oven, etc. have a 11% share and the electronic elements have the share of 50.6%, with a decline 0.9% and 2.1% respectively compared with the year 1999. However, the export volume of electronics such as computers and mobiles phone, etc has the share of 35.4%, with an increase of 3.45 than that in the year 1999.
The export volume of South Korea's IT products raise from US$ 39.96 billion in 1999 to US$ 51.16 billion in 2000, which has a share of 29.7% in the total export volume. The favorable balance of trade has a tendency to constantly increase. During the period of 1996-2000, the average annual growth rate for the IT products exports reached 14.7%, especially for the software and computer related services, it maintained the high growth rate of 51.15.
In 2001, although the total export volume maintained negative growth, the exports of single product-mobile phone is growing rapidly and it is becoming the new major export products. According to the estimation by the Ministry of Information and Communications, the export volume of mobile phoned in South Korea in 2001 is near US$ 7 billion, an increase of 40% more than that of the same period of last year. The mobile phone exporters of the main manufacturers in South Korea, such as Sumsung, LG, and PANTECH increased by 20%, or 3.4 times as much as shoes of last year. Each company especially strengthens the market sales in the rising market in China which demands large quantities of mobile phones. The export volume of mobile phone in Sumsung in 2001 was US$ 3.7 billion (22 million mobile phones), an increase more than 20% so compared with that of last year (US$ 3 billion). The company planned to foster the mobile phone as the new strategic export product instead of semi-conductor. With the aid of sales prosperity in American market of 100 thousand mobile phones exported to SPRINT corporation IN the USA, the export volume of LLG reached US$ 1 billion (6.5 million mobile phones) in 2001, two times as much as that of last year. PANTECH company signed a mobile phone supplying contract of US$ 700 million with Motorola in June, 2001, the individual contractual value was increased 4 times as much as the export volume (US$ 200 million) of last year. By the end of the September in 2001, the export volume of mobile phone in SEW corporation had reached US$ 100 million, over two times as much as that of the whole year in 2000. The Ministry of Intelligence and Communication in South Korea thinks that the rapid development of the rising mobile phone market in China and Medium and South America as well as the technology of South Korea's mobile phone have generally been accepted gradually in the world, which is the main reason of the rapid growth of South Korea's mobile phone export. Mobile phone is becoming a new export commodity in Korea, see www.ecic.gov.cn, 23 December 2001.
Software and services industries increased rapidly. The software industry made up a great share of the whole IT market due to the 405 growth rate of annual sales volume. The sales volume of software in 1999 was US$ 1 billion, and US$ 1.4 billion in 2000. The output value of services industry was US$4 billion in 2000. The Internet related industries developed very rapidly due to the development of Internet. The industries such as network equipment, Internet services and content services will become the future growth points.
Under the support of the government, the quantities of registered IT high-tech enterprises increase very rapidly with an increase rate as high as 71%. Of all the newly registered enterprises, about 505 are from IT sector. The IT employed population in 2000 made up 3.35 of the total employment. IT employed population increased by 6.1% during 1998-2000, among which the population on software and computer related services increased by 16.1%. However, all employed population increased 3.8% during this period. From the percentage of employment in each department of IT Industry, IT services department declined from 25.6% to 21.3%, the equipment manufacturing department increased from 62.5% to 64.4%, the software and computer related services increased from 11.9% to 14.3%/

1.5 An Analysis on Technology Application is South Korea
15.1 The network Development in South Korea
During the five years from 1994 to 1999, the users of South Korea's Internet increased from 138 thousand to 10.86 million, an increase of 79 times, among which, 11.7% net users had undergone net transaction more than once. The net users in South Korea had increased to 15.75 million by the end of June 2000. So the network popularity rate reached one-third. At the same time, the PC popularity rate was also near to one quarter, and mobile phone popularity rate was over 50%. It is worth mentioning that South Korea is one of the four countries with the lowest net surfing cost in 29 OECD member countries, the net surfing cost per unit time was less than one third of the cost in Japan, which composed one of the important factors that net users in South Korea increased sharply. In addition, as a rising market, wireless Internet also developed rapidly in South Korea. By the end of April, 2000, the wireless Internet users had reached 1.88 million, and this figure can be expected to reach 25 million in 2002.
By the end of June, 2000, the member of net stations in South Korea registered more than 200 thousand, and reached 217 thousand. From net station establishment and domain name registeration, South Korea stood in the forefront of the world. According to world net station listing results issued by ALEXA in USA not long ago, as many as 38 Sooth Korea net stations ranked within 1000 top net stations in the world, among which 6 net stations ranked within 100 top net stations in the world, next only to the united states, while ranking the second place in the world. DAUM (www.Daurm.Net ), the first place in South Korea net station, listed at the 11th followed by YANHOO SOUTH KOREA, which ranked the 16th place in the world. According to the statistics issued by NSI of the United States, the class domain name (.com) used by Korea companies in 2000 was only while next to the United States, ranking the second place in the world, while it only ranked the sixth place in 1999 and the 29 the place in 1998. So we can see South Korea has obtained great achievements on Internet field. In all cities except cities of the USA, the class domain name number registered in Seoul ranked the first place from the third place in 1999, however, it ranked 29th in 1998. These progresses reflected the commercial degree of Internet in South Korea from a side aspect. The e-Commerce has a fine development environment due to South Korea's rich network sources.
1.5.2 Development of e-Commerce in Korea (the Republic of Korea)
According to the Comprehensive Countermeasures for Promoting Electronic Commerce promulgated by the Korean government in February 2001, more than W 70 billion is expected to be invested in the major industries such as electronics, automobile, shipbuilding, iron and steel, petrochemical and biochemical engineering the biochemical engineering to establish their complete e-Commerce systems respectively so as to enhance the competitiveness of Korea's industries by a large margin and build Korea into a developed country in e-Commerce by 2003.
According to the Statistical Investigation on E-Commerce Enterprises in 2000 published in June 2001 by the Korea National Statistical Office, the overall scale of e-Commerce in Korea reached W 57.6 trillion in 2000, far above the expected W 17 trillion. Of all the e-Commerce transactions, the B to B (business to business) transaction enjoyed a scale of W 52.3 trillion, accounting for the overwhelming majority. In contrast, the scale of B to C (business to customer) e-Commerce enjoyed a small market scale of only W 733.7 billion, whereas the scale of export oriented e-Commerce reached W 4.4 trillion. The investigation showed that the proportion of the manufacturing sector was the largest in all industries that sold products through the Internet, reaching 93%, of which the metallurgical industry accounted for 38.15, the electrical appliances industry 21.15, the auto industry 16.3% and the electronic spare parts industry 11.4%.
1.5.3 Other aspects of IT application in Korea
To develop the software industry is a focal point of IT development in Korea. The Korean government established 20 Software Vitalization Zones in 2001, thus laying a foundation for the software industry. The Ministry of Info-communications of Korea made out a draft plan for investment in software, which defined investing US$ 1 billion in the development of the software industry by 2005. The annual software export will grow to US$ 3.3 billion in 2005 from US80 million at present. In order to vitalize the software industry, the government not only provides funding support for setting up software enterprises but also encourages and helps 80 software enterprises to develop business abroad, cooperate with international capitals and compete with famous enterprises, while striving to become internationally renowned enterprises within 5 to 10 years.
In order to increase the level of informatization of small-and medium-size enterprises, the Korean Industrial Property Office of Korea and the Small and Medium Business Administration issued the detailed propgram of IT (Information Technology) Utilization in Ten Thousand Small and Medium-size Enterprises in early 2001, and over 8000 small and medium-size enterprises will obtain from the Korean Industrial Property Office the soft-wares concerning such business operation systems as supply, accounting and inventory management on a free basis. The Korean Industrial Property Office will also support more than 2000 small and medium-size enterprises than have been equipped with the ERP system by means of offering half discount in the installation fee. It is expected that the department of Small and Medium-size enterprises and the National Congress of Local Commerce and Industry will offer relevant softwares to small and medium-size enterprises free of charge by the end of 2002.
Information technology is changing with each passing day, so it is particularly essential to enhance international cooperation in some new fields of technology. South Korea has always attached great importance to international cooperation. South Korea announced in May 2001 that South Korea and Japan would cooperate in the field of 4G mobile communications. Both countries will carry out research cooperatively in such aspects as specification and standard, system development, formulation of communication rules and international roaming of the 4th generation mobile phone. According to their plan, the Japanese Communications Research Laboratory (CRL) and Korean Electronics and Telecommunication Research Institute (ETRI) will cooperation in the research. In order to realize satellite digital TV broadcasting during the 2002 World Cup and offer high-quality communication service to foreign visitors, both countries will work together to establish the Internet network and build DB (Data Bases) to create wired and wireless communication environment between the two countries and conduct ultra-high speed satellite communication experiment.