Study Of Korean Industrial Policy

Industrial policy is the policy in which a country intervenes the whole industry's or a specific industry's production, investment and transaction activities by supporting, regulating and controlling the industry in order to achieve economic growth and strengthen international competitiveness. In the speedy development of South Korea's economy, the industrial policy that South Korean government has enforced played a crucial role in the different phases of economic development. This industrial policy-oriented economic pattern resulted in a continuous high-speed economic growth of over 30 years and finally turned South Korea from an underdeveloped country into a developed one. This is a miracle of the so-called "compressed" economic development, and had already become a research subject for many domestic and foreign economics scholars. By studying South Korea's industrial policy, we should admit, South Korean government played an active role and obtained attention-getting achievement especially in offsetting market's limitation and accelerating economic development of underdeveloped countries and optimizing industrial structure. However, we should at the same time notice that the government-leading industrial policy also has the theoretical problem of governmental malfunction and many side effects if inappropriately applied. The 1997 financial crisis broken out in South Korea was a good example of it Therefore, we should not ignore the malpractice caused by long-term government over-intervention of economy while affirming the positive function of this industrial policy -centered economic strategy in the process of long and continuous development of South Korea's economy. Only by following the economic rules, harmonizing the "invisible hand" of market operation and the "visible hand" of government and finally forming the all-regulating "double-hand system" can we achieve the just, effective and continuous development of social economy in different periods of economic development. South Korea's economic mould no doubt provides many countries, especially developing countries with a useful example of high-speed economy. Meanwhile, there is much that our country can make use of in handling the relations of government, market and plan in economic development, for China has carried out over 20-year reform and opening policy and is now adjusting industrial policies and in a transitional period from a planned economy system to a market economy system.