With its geographical advantageous location at the heart of Northeast Asia, Korea is an attractive destination for many foreign multinational corporations seeking to target Asian markets. Korea's sophisticated and extensive logistics infrastructure provides highly efficient and reliable air, land and sea transportation.
The Korean peninsula is poised to emerge as a mammoth transportation hub connecting East Asia and Europe as North and South Korea are jointly restoring inter-Korean railway connections. It is expected that connecting the inter Korean railway system to the Trans-Siberian railway and Trans-Chinese railway will significantly boost the economic synergy between the Eurasian and Pacific economies.
Thanks to its strategic location, multinational corporations also give high marks to the strategic importance of Korea as production platform from which to serve East Asian markets. Volvo Construction Equipment has its global production base in Korea as does Flarion, an American IT firm, its Asian head offices. Motorola established its research center in Korea. Moreover, leading foreign corporations that use Korea as a manufacturing/export base include Fujitsu, Nokia, Hewlett Packard and BASF.
Figure R: Accessibility to Korea
Neighboring Consumer Markets
Korea is the gateway to the huge markets of Northeast Asia, which currently account for 22 percent of world’s GDP, lying between the two giant markets of China and Japan. Located 400 kilometers southeast of Korea, Japan had a GDP of US$3,978.7 billion in 2002 and is second only to the United States in terms of economic size. Moreover, only 370 kilometers west across the Yellow Sea lies China, potentially the world's biggest market with a 1.3-billion population. In total, Korea is surrounded by nearly 2 billion East Asian consumers, of whom 500 million are located in the ASEAN countries. In particular, since China's accession to the World Trade Organization (WTO) in December 2001 it is expected that Korea will act as a bridgehead into the Chinese market in consideration of the fact that Korea's trade with China is growing rapidly from year to year.
Figure S: Populations in Northeast Asia Region