The South Korean conglomerates loan scale

Development of large enterprise groups in South Korea and its reference

Author You Anshan
Keywords, the sources of social science, the unit of Shanghai, click number 72, the number of pages 35 to 39 pages in 1998 1998 months in http://www.lw23.com/paper_105595501/

Asia excluding Japan, only South Korea has the first class high. From twentieth Century 50 time the formation of large enterprise groups, the Korean economy development of each step and large enterprise groups to forge indissoluble bound, so to speak, the no development of large enterprise groups is not the Korean economy. But in recent years, due to the changes of internal and external conditions, the Korean economy remain stagnant, corporate revenues, especially since 1997, South Korea then bursts of large enterprise groups students fail and troubled event, Korean financial and monetary crisis and become one of the most direct reason is the most important, which brings great impact to the economy of South korea. Therefore, analysis of the formation of large enterprise groups in South Korea, effect and problems of enterprise groups will have a very good reference to China, how to set up and develop.
The rise and characteristics of large enterprise groups
Specifically, the rise of large enterprise groups in South Korea is 50 years later, roughly divided into two periods.
First, 50 in the formation of large enterprise groups. There are "Venus", "the wire", "Oriental", "Ssangyong" etc.. But since 3 years of the Korean War, the Korean economy is almost collapse . So this period of the Korean economy consists of large enterprise groups, mainly by American Western aid developed. 1953-1961, America for South Korea to provide 17 billion in aid, mainly consumer goods, the South Korean authorities to put these aid as the raw material of local industries, sold to private enterprises, private enterprises and required only minor process can obtain high profits, but and continue to expand the scope of business, form scale enterprise group.
in early second, 60 in the formation of large. From this period, South Korea began to carry out the five year economic development plan, in order to accelerate the development of the economy, as soon as possible to get rid of poverty, the South Korean government adopted a "not all balanced growth strategy" in the allocation of resources, the country's limited resources, put heavy technology department, hope to drive the development of other industries. In the scale of enterprise, as the economies of scale in the pursuit of quantity system, and take on fostering large enterprise strategy, and provide various preferential policies cheap financing, such as several large enterprise group in 1965, "Samsung" and get a 16000000000 won to bank loans, as when the South Korean currency amount of 1 / 3. in this policy support, not only formed in 50 large enterprise groups to further consolidate, expand the scope of the production, but also the emergence of a new batch of large enterprise groups, such as "modern", "Daewoo", "Lucifer" and so on, the current domestic 50 largest enterprise groups, there are about 40 it was in this period developed.
The formation and development of from 50-60's large enterprise groups, there are two points worthy of attention: one country, with Europe and the United States developed compared to development has its own form and characteristics, South Korean conglomerates, the former is the big fish eat small fish annexation of large enterprises, small enterprises from competitive capitalism developed; the latter is in the special international environment, in the capital of South Korea aid and support of the government, rather than under the conditions of market economy development . Secondly, the development of the Korean enterprise groups have gone from a vertical to horizontal development, from a single specific companies to the development of comprehensive enterprise scale. Such as "Samsung", 50 time is limited to textile industry, at present has the electronics, electronic tube company, chemical company, heavy industries, shipbuilding company, life-insurance company and so on, almost Everything is contained therein. "Modern" also started from the 50's of the construction industry, comprehensive enterprise development far from construction machinery, automobile, shipbuilding four strategic industries, including space, petrochemical and microchip manufacturing field.
Role play a decisive role of large enterprise groups
In Asia's "four little dragons", the biggest characteristic of the South Korean economy is having many large enterprise groups, the world 500 big enterprises, South Korea made up dozens of seats, the "modern", "Samsung" enterprise also entered the ranks of the top 50. At present, 30 of the largest enterprise group control almost South Korea's economic lifeline, therefore, play a decisive role in the whole national economy, the role of large enterprise groups. Specific performance:
1 in the overall economic development in the absolute. Most of the current industry in South Korea, especially some of the emerging industries, such as electronics, automotive and other large enterprise group control. According to statistics South Korea even bargain Committee, by the 1997 in March, business relations with South Korea 30 big enterprise has 817 home, control of South Korea's heavy industry, light industry, transportation, commodity circulation, finance and insurance, foreign trade, and science and technology, culture and education, health and other departments. This , 1996, South Korea "modern", "Samsung", "Venus", "Daewoo" ten enterprise sales of up to 246000000000000 to 11600000000 won, accounted for 89.2% of the country's GDP.
2 monopoly of the local. Due to the large size, large enterprises in the domestic production, sales has a monopoly on obvious characteristics of domestic market, most of the products are produced by large enterprise groups. Such as power generation Korea Electric Power Corporation 1994 year is 27428000 kilowatts, accounting for 8.7% of the total national power generation. Hyundai, Daewoo, KIA three group monopolized the Korean automobile industry. to semiconductor products as an example, the late 80's, "Samsung" group of 64KDRM production yield is 6000000, the annual demand and the local market was only 2000000. Therefore, only "Samsung" alone is sufficient to meet local market.
3 accounted for more than half of total exports. Exports to drive the development of the whole economy is characteristic of South Korea's export-oriented economy. In the "output country" policy, since the 70's, the South Korean conglomerates have comprehensive companies themselves, to strengthen the ability to export. Therefore, the total annual export 30 South Korean conglomerate's accounts for about 70% of the country's total export.
4 overseas investment, development. Export is the lifeline of maintaining economic growth in South Korea, after 80 time metaphase, blocked trade protectionism breakthrough in developed countries increasingly serious, large enterprises develop overseas industry service, develop new markets, such as the "Venus" group to establish a factory for the production of color TV and video in Germany, and established the "Venus telecommunications in America Feinikesi". "Daewoo" group set up a Oil Refinery Co in Belgium, in Pakistan established a textile factory, at the same time, Chinese ASEAN, the former Soviet Union and Eastern European countries and actively explore new markets. At present, 50 large enterprise groups in South Korea to conduct business in more than 50 countries and regions worldwide, especially in the Chinese most attract sb.'s attention, according to statistics, South Korea "modern", "Samsung" and the 20 large enterprise groups in the China investment project has reached a total of more than 160, China has become the first South Korean investment target and the third big trade.
5 of the main force of technology development. If say, South Korean enterprises mainly rely on the introduction of technology, the production of cheap products to be rich words, now own laboratory, for the production of high value-added products have high hopes. After 80 time metaphase, "Samsung", "Venus", "Daewoo", "modern" and other large enterprises have established their own laboratory, to promote its own research and development work. Such as Samsung Electronics research funding in 1976 accounted for the total sales of the 2 %, has been increased to about 10%. Have independent technology of their own, do not let foreign control technology is the South Korean conglomerates to strengthen an important strategic goal of research and development. Therefore, the South Korean enterprise groups with particular attention to the digestion and innovation of technology. Nuclear power is a good example of. In the early 80, No. 1, No. 2, kori nuclear power equipment is introduced from abroad, even the cement, building materials are imported. In 1985, No. 3, No. 4 ancient and uljin No. 1, No. 2, No. 1, the main equipment had 2 nuclear power equipment by foreign supply, but auxiliary equipment localization. In 1990, Emmanuel 3 , No. 4, nuclear power equipment localization, the main equipment in 1995, No. 3, No. 4, uljin nuclear power equipment is completely self design, so that South Korea has become a nuclear power technology exporter.
Big business problems
Effect of no large enterprise groups in the Korean economy question, but because of economic system and structure, it also exposed some problems in the development process, it is because of these problems led to large enterprise groups in recent years have got into trouble, especially in 1997, South Korea's large enterprise groups after another outbreak of the financial crisis, so that the ranking eighth KIA group, fourteenth of the Han Po group, nineteenth of the Jinro group about 10 large enterprise group has successively for debt, fund revolving difficulties and bankruptcy.
One of the problems : for grandiose projects, extension. Enterprise for grandiose projects, focus only on the external number scale, emphasizing the market share, while ignoring the quality of enterprises and improve the benefit of development of large enterprise groups, resulting in lack of confidence, the adverse consequences of low efficiency benefit. Over the past 30 years, in the government's preferential policy stimulus, the South Korean conglomerates mainly is carries on the expansion to "octopus tentacles" way, as long as it can expand the scale will fling caution to the winds, especially to those unrelated diversification penetration. So the South Korean conglomerates have dozens of enterprises, such as "modern" 57 ", 80" Samsung ", there are 49 Venus", etc.. The group company mutual loan guarantees and insider trading activities, the relationship like cobwebs perplexing, far-reaching, KIA group is a typical example. "KIA" production car based, with 28 lines listed enterprises, the field has been extended to and automobile manufacture and there is no relation between the special steel and construction and other fields, especially in the absence of an accurate grasp of the special steel demand, blindly invest 1 trillion won, the bound group hand feet.
Problem two, excessive debt, lack of confidence. Unlike in Europe and the United States, South Korean large enterprises not under the condition of market economy, through their own accumulation of competition and free, but under government protection, borrowing through bank and the rapid expansion of. This makes the enterprise to financial institutions and a high degree of dependence and the dependence of self owned capital of enterprise is very low. According to statistics, the South Korean Central Bank, South Korea in 1996 the top 30 most conglomerates owned capital ratio is only 18.2%, while the average debt rate is as high as 386.7%, more than two times the American 160%, 4 times more than Japan's 80%. The disadvantages disease this highly leveraged economy development mode, in the economic boom, because the enterprise benefit is good and not for enterprises constitute obstacles. But once the recession, or product sales are sluggish, liquidity will be obstacles. In order to survive, the enterprise had to be to bank loans, the debt interest burden is getting heavier, more and more big, the financial structure is very fragile, once volatility would get into trouble. According to statistics, high debt burden has sales of the enterprise often profit from 1996 2.5% down to 0.2% 1995 years, and the financial burden is as high as 5%, that is to say, sold 1000 yuan product profit of only 2 yuan, but the payment of bank interest rate is as high as 50. In 1997, South Korea's 30 largest enterprise group, there are 2 / 3 of poor management, profit rate is lower than the loan interest. Thus, rely on excessive borrowing enterprises, in the economic downturn, will be sales stagnation and huge financial costs and the first hit.
Question three: political and economic collusion, trading power for money. The South Korean conglomerates are a family of private enterprises, but has a close relationship with the government. In South Korea, the enterprise to develop, there must be some hard political backer, therefore, conglomerates are generally employed with the government's military and political officials entrusted with the task of using their close relationship, through the relevant departments of the government of the joint, or to spend lots of money and political will, the relevant government department brought online expansion provides the highest level, the as the enterprise . Especially in South Korea's financial giants, to be elected several candidates "gifts" of "political capital", to get the upstart reference, in the political arena, the object's lawmakers have influence and financial political investment. However, the rise and fall of several politicians who have enterprise, namely through the non normal relationship to enlarge enterprise scale, its foundation is often unstable, will fluctuate as the right figure change. Such as the Han Bao group was not a very small enterprises, after entering 90 age, in just a few years time, to get huge loans more than 40 financial institutions to $about 6000000000, a jump into South Korea's big enterprise groups, the main reason is that the group president Zheng Taishou spared no expense to bribery, a large number of dignitaries to its backing, the president's son Jin Xianzhe is one of the representative figures of the main, so big loans without careful investigation, the inflow of "Han Bao" account, but with the end of Jin Yongsan's term of office and its asymptotic, his political reasons, "Han Bao" bank loans has become difficult, finally escape bankruptcy.
problem four: bank loans, monitoring. Over the years, the government has been adopting the so-called "policy loans", namely to administrative power to the bank financial institutions issuing policy loans "to some industry or enterprise". bank loans only to see whether the instructions and have no written guarantee, and enterprise in the written warranty and often resort to deceit, financial institutions by the high profit driven, and "entrepreneurs can perish, enterprises are not dead" influence, the business loans tend not to be examined strictly, especially for large business loans, even the scene investigation is not, therefore, banks "credit enterprise" useless without restrictions, the role that the , now the South Korean financial institutions was not a debt clear the closure of enterprises, and even do not know these bankrupt enterprise loan numbers, sometimes strange there statistics and actual loan number differ hundreds of billions of yuan. visible monitoring, banks on their lending capacity almost to cease to exist except in name.
Question five: family management, the "two rights" is not. South Korea's large enterprises generally have strong family color, " ownership" and "management rights" are mixed together, completely is the management of family. The development of enterprises, is also planning according to the founder's will and judgment of formulation, without any restriction mechanism. The historical development of Korean enterprises are very short, family management and founder of the leading business decision-making phenomenon has not been very good change, this is not only South Korea group and its weaknesses, with the passage of time, this situation has increasingly become the further development of large enterprise groups in South Korea obstacles.
In addition, the development of excessive construction of large enterprise groups have also affected the development of small and medium enterprises. For example, according to statistics South Korea's parliament, only the 30 large enterprise groups of loans in 80 time, accounted for 43% of total loans, and loans to SMEs are scanty. This is bound to the development of large enterprise groups and the small and medium-sized enterprise is extremely unbalanced.
Korean conglomerates although there are a lot of problems, but the fair fair, large enterprise groups to South Korea's economic take-off of the enormous contribution is universally acknowledged: in the past 30 years, South Korea's GDP grew at an average annual rate of 8%, GDP of average per capita has grown from $80 in 1960 to more than $10000 in 1996, become the world's eleventh economy country, and in the 1996 formally joined the OECD, formally become rich club members; a good industrial base, especially in electronic, automobile, heavy and chemical industry with strong products in the international market competitiveness; in addition rate, bank savings is higher, about accounted for 30% of GDP development provides a good economy, the domestic economy source, plus international investors in Asia are still optimistic about the prospects for the development of long-term. So, as long as the policy is appropriate, effective measures, strengthen the institutional and structural reforms, the South Korean group is expected to be in not too long a time to go out of the difficult exit, to reproduce the old style. Therefore, people never think Korean conglomerates have been financial storm washed away, but in the difficulties and adjustment period, through this period, the South Korean enterprise groups will be more competitive. The this, we must have a clear understanding of.
Significance of reference to China
in recent years, China began to emerge in group I, and develop more rapidly, as important in the entire economic development role increasingly evident, is caused by the government departments, industry and academia, the heavy . General Secretary Jiang Zemin also made clear in the 15 big reports of the party, to the development of cross regional, cross industry, cross ownership and transnational business of large enterprise groups, which pointed out the direction for the development of large enterprise groups in china. But what if according to the actual situation Chinese, learn from the experience of others, the better the formation of large enterprise groups with their own characteristics, which have the ability to promote the overall economic development of inner, external competition and international Multi-National Corporation strength, is we need to constantly exploration and research. The South Korean conglomerates that were once model to emulate many developing countries and regions, has exposed the problem, the development of the present stage of our country large enterprise groups with has the direct and realistic reference.
First of all, the development of large enterprise groups must be to improve the quality and efficiency of enterprises as the premise, must not be greedy big and fast, only pay attention to the extension of the expansion of the scale of the number, can not go "development road of high cost low - products", at the expense of the group's overall profit and equity returns for the development of enterprises to obtain the price.
secondly, diversified development must always focus the business of the group to expand, stand firmly and fight steadily, must not act with undue haste, front too, particularly strange no introduction and the group core business that is the relation of industry to extremely. Diversification does not necessarily reduce the management risk of the enterprise, and in fact, if the enterprises to enter the new field of unfamiliar, no advantage, but will increase the risk, but only the main industry bigger, solid foundation, economy of scale, can withstand the domestic and foreign market competition.
Third, to straighten out the relationship between government and enterprises. The functions of the government's macroeconomic regulation must be strengthened, but not too much interference in the business activities of enterprises, but not the enterprise too much under their protection. The formation and the development of large enterprise groups must take the capital as the link, through the role of the market economy and gradually develop and grow, the research and development mechanism to establish new products, new technology market oriented, and constantly improve the technology content of products, so as to enhance its competitiveness in the international market.
Fourth, enterprise debt must be moderate. At present, the enterprise liabilities rate of internationally recognized warning line is more than 60%, this will cause the enterprise development the lack of confidence, the adverse consequences of a wave will be troubled, Korea left in this respect is a profound lesson. In addition, will must expand the financing channels for enterprises, strengthening the cultivation and development of the capital market, to change the over reliance on bank financing situation.
Fifth, from the legislation to ensure the healthy development of the relationship between banks and enterprises. Strict corporate loan approval system, strengthen the monitor banks' lending and restriction mechanism, in order to avoid bank loans bad debts phenomenon occurred, caused by the enterprises in the at the same time, but also effectively prevent blind investment and expansion of enterprises.
Sixth, pay attention to play the role of Chinese and foreign enterprises. In the construction of large enterprise groups development at the same time, the development of space to small and medium-sized enterprises have sufficient. All small and medium-sized enterprises can produce goods, as far as possible, let the small and medium-sized enterprises to produce, and provide preferential measures in financing, trying to combine between SMEs and balanced development.