The U.S. is the source of 98 percent of Korea's trade deficit in technology because firms there hold the rights for IT technologies like CDMA and liquid crystal displays which are crucial in Korean flagship exports. Korea posted a technology trade deficit for the eighth year running at US$3.14 billion last year.

The technology balance of payments shows the relation between a country's payment of royalties for foreign patented technologies and its receipt of them.

According to a report released by the Ministry of Education Science and Technology on Thursday, Korea's own technologies were mainly exported to China (30.6%) and the U.S. (13.1%), but more than 60 percent of Korea's technological imports came from the U.S., with the result that the biggest technology trade deficit was with the U.S. at $3.1 billion.

The second largest deficit was with Japan ($540 million) and the third largest with the U.K. ($230 million). The biggest surplus came with China ($740 million), followed by Slovakia ($260 million) and Hungary ($110 million).

Former Singaporean Prime Minister Lee Kuan Yew on Tuesday admitted that Singapore's insistence on bilingual education has been wrong. The father of current Singaporean Prime Minister Lee Hsien Loong, Lee now holds the honorary title of minister mentor and was prime minister from 1959 to 1990, and senior minister from 1990 to 2004.

When Singapore separated from Malaysia in 1965, Lee made the country strictly English-speaking for the subsequent 19 years. But with the rise of China as a powerhouse in the global community, Lee hoped to make the country bilingual, having children educated in both English and Chinese since 1984.

"We started the wrong way," Lee told Channel NewsAsia. "We insisted on ting xie (listening), mo xie (dictation) -- madness!" He confessed that he still cannot speak Mandarin perfectly, even after over 40 years of learning it. "Nobody can master two languages at the same level. If (you think) you can, you're deceiving yourself. My daughter is a neurologist, and late in my life she told me language ability and intelligence are two different things," he said. "Successive generations of students paid a heavy price, because of my ignorance, by my insistence on bilingualism."

But he said no matter language skills people have, they will use Mandarin in later life if they learn it early, saying that the education authority and parents in English-speaking households should help make Mandarin attractive to children and encourage them to speak and listen to it as much as possible.

The U.S. is facing a powerful challenge from China to its status as South Korea's preferred partner, the Financial Times said Thursday. "When George Bush senior visited Seoul as U.S. president 20 years ago, things were simple -- the U.S. was the undisputed main ally and trade partner. Astonishingly, there was only one weekly flight from South Korea to China, the communist foe."

But it added, U.S. President Barack Obama "on Wednesday visits a South Korea where the U.S. is no longer the only show in town. China is now the main trade partner, with 642 flights each week."

The U.S. remains the chief political and military ally of South Korea, but "vital issues such as a trade agreement and North Korea's atom bombs have been sidelined in the U.S., while China plays a greater role in both Koreas," the daily said.

It quoted Andrew Gilholm, a senior analyst at British international security consultancy Control Risks, as saying, "The long-term idea is that Seoul will ultimately drift more towards Beijing's orbit, although less so under President Lee Myung-bak."

With regard to North Korea, the U.S. is clearly behind China. Obama will send the special representative for North Korea policy Stephen Bosworth to Pyongyang on Dec. 8 for talks to find a solution to the North Korean nuclear issue. Bosworth is also a professor at Tufts University. The daily called him a "part-time diplomat," saying, "Diplomats in Seoul... are unconvinced that Mr. Obama's choice, Stephen Bosworth, is the right man for the job."

"By contrast, China has intervened at a far deeper level, sending its premier, Wen Jiabao, in October," to persuade North Korean leader Kim Jong-il to resume nuclear talks, it added.

With a nuclear threat from the North lingering, "even traditionally pro-American conservative lawmakers in Seoul are now criticizing the U.S. for limiting South Korean ballistic missiles [under the Seoul-Washington missile agreement]. They are demanding Seoul be allowed its own long-range missiles" to deter the North, the daily wrote.

But the U.S. still has a chance to make up for its poor showing. As it is a "vigorous democracy with historical suspicions of the regional superpower," South Korea's political ties with communist-ruled China are not as smooth as its economic relations, the FT speculated.

Korea's economy will grow 4.4 percent next year, much more than previously predicted, as exports and domestic business recover, the OECD forecast in its biannual report on the world economic outlook on Thursday. The outlook is the highest among the 30 OECD member states.

The OECD report predicts that South Korea will see 0.1 percent growth this year but 4.4 percent growth next year, far higher than its prediction in June of a 2.2 percent contraction this year and 3.5 percent growth next year.

"While the impact of fiscal stimulus will fade in 2010, a sustained pick-up in exports is projected to help boost output growth to 4.4 percent in 2010 and 4.2 percent in 2011, with a rebound in domestic demand and a marked fall in unemployment," the report said.

But it urged Korea to boost enhance fiscal soundness by cutting down spending and improve productivity through restructuring, with the focus on the non-manufacturing sector.

The OECD estimates world economic growth for 2010 at 3.4 percent and the average growth rate of the 30 members at 1.9 percent.   
 
Finance Minister Yoon Jeung-hyun said, "We expect the economy to grow next year at a faster rate than a previously-estimated 4 percent." He made the remarks in a meeting with the heads of economic think tanks in Seoul.

"Since the employment situation is still bad, it's too early for low-income earners to feel the economic recovery," he added. "Changes in prices of oil and other raw materials are also a variable in the operation of the economy next year."

President Lee Myung-bak, speaking at a press conference Thursday with U.S. President Barack Obama, said, "The relationship between our two countries is excellent and stands stronger than ever." Lee has met Obama three times over the last 10 months. "Obama's visit to Seoul is the last -- and perhaps easiest -- leg of an Asia trip in which he was forced to deal with a newly assertive Japan and an increasingly powerful China," the New York Times wrote.

During this Asia trip, Obama saw China's rise to power and Japan's shift in attitude up close. For more than half a century, Japan was America's closest ally in Asia, but recently announced it would seek a more "equal relationship" with the U.S., sending bilateral relations into uncharted waters. During his China visit, Obama avoided mentioning sensitive topics, and Beijing, which has become the world's largest holder of U.S. Treasury bonds and one of the top two superpowers, confidently rejected certain U.S. demands, challenging the absolute dominance the U.S. had held in Asia.

Lee and Obama apparently discussed those two issues insofar as they affect the Seoul-Washington alliance. The U.S.-Japan alliance is closely linked to it in the traditional tripartite structure in the region, while China is North Korea's sole ally and has a direct interest in issues involving the Korean Peninsula. The fact that China and the U.S. are in a tug-of-war over who dominates Northeast Asia and around the world means South Korea's security environment is undergoing a sea change.

The leaders of Korea and the U.S. agreed a meeting of their foreign and defense ministers some time next year, which marks the 60th anniversary of the outbreak of the Korean War, to discuss specific ways to develop the alliance. The U.S. already holds similar consultations with China and Japan.

A rapid shift in the balance of power in Asia to China is undesirable from Korea's point of view. The U.S. will have to re-evaluate the value of its relationships with Asian countries if China's influence in the region increases rapidly. Korea and the U.S. must use the ministers' meetings as a strategic framework to deal not only with North Korea, but also to discuss changes in China and Japan and in Northeast Asian politics. The Seoul-Washington alliance must move on from a mode where U.S. support for Korea prompts it to rely entirely on America. The relationship must adapt to changing conditions and move forward.

Lee and Obama spent the most time during the summit talking about ratification of the Korea-U.S. free trade agreement, but once again failed to reach a definitive conclusion because the U.S. was unable to present a time frame for ratification. The U.S. government and Senate must realize that the FTA goes beyond trade and serves as a chance to upgrade the Seoul-Washington alliance as the diplomatic environment in Northeast Asia undergoes rapid changes. Signed in March 2007, the FTA cannot continue in limbo forever. Korea and the U.S. must now handle all bilateral matters, including the ratification of the FTA, from the perspective of strengthening their alliance.

The headquarters of GM in Detroit said on Tuesday it will start producing the Lacetti Premiere compact in the U.S. from April next year. The vehicle was developed and first manufactured by GM Daewoo, the Korean unit of the U.S. carmaker. Since its release in November of last year, GM Daewoo has rolled out 370,000 Lacetti Premieres, including 330,000 exported to Europe, China and other foreign markets, with the model becoming the driving force in the company's rising sales. GM intends to produce the car in the U.S., boost annual output and sell them in North America and Europe. It is taking away the crown jewel of its Korean unit.

As it became increasingly difficult to operate the Korean unit amid the global downturn early this year, GM asked the state-run Korea Development Bank (KDB) for a capital injection and additional loans for GM Daewoo. KDB, which is GM Daewoo's second-largest shareholder, demanded that GM give the Korean unit the rights to vehicle technologies it develops and guarantee at least five year's worth of production orders. GM rejected those demands and decided to pursue a capital injection on its own. Now it is about to take away the unit's most profitable model.

When its Opel division faced bankruptcy, GM asked the German government for financial aid. The German government provided the U.S. company with 4.5 billion euros in support after it pledged to sell the unit after reviving it to prevent mass layoffs. But once economic conditions improved, it decided not to sell Opel.

After being acquired by GM in 2002, GM Daewoo has not received any new investments from its parent nor developed any new models other than the Lacetti Premiere. Over the last few months it has been working to cut its research and development staff by urging them to apply for early retirement. If GM had truly intended to bolster GM Daewoo's operations, it would not have done things this way. If GM Daewoo loses its role as a production base for compacts and subcompacts, its future will be bleak and GM will end up wasting the Korean unit's brand value.

The meeting between U.S. President Barack Obama and Chinese President Hu Jin-tao in Beijing was an opportunity to signal the beginning a new world order led by China and the U.S. During his four-day visit, Obama stressed that Beijing was a "powerful partner" in U.S. efforts to deal with global challenges. "A strong and prosperous China can be the source of strength for the international community and the United States will not seal China off," he said.

Even on the issue of Tibetan independence, Obama practically sided with China by saying, "We recognize that Tibet is part of the People's Republic of China." Gone are criticisms of Beijing's human rights abuses which previous U.S. presidents made during their visits to China. The U.S. and China both avoided any unpleasantness. "China's partnership has helped the United States pull out of the worst recession in a generation," Obama said.

The U.S. recorded a $1.4 trillion deficit over the last year starting in September of 2008, while the accumulated fiscal deficit amounts to 80 percent of its GDP. The U.S. government must continue issuing Treasury Bills in order to run the country. China is America¡¯s largest creditor owning $800 billion worth of U.S. Treasury notes. The U.S. is no longer in a position to tell China what to do.

The North Korean nuclear standoff was the first issue where agreement was announced at the post-summit press conference. "We agreed on the importance of resuming the six-party talks as soon as possible," Obama said. "Both of us remain committed to resolving the nuclear issue on the Korean Peninsula through dialogue and consultation," Hu said. "Such a commitment serves the common interests of China and the United States and all other parties concerned."

Matters concerning the Korean Peninsula will become staple items on the agenda of future U.S.-China talks. Both countries have deep interests on the peninsula. In July, the U.S. government even proposed strategic talks with China to deal with sudden and unexpected changes happening in North Korea. The North Korean nuclear problem, Korean reunification and other issues will be discussed between Washington and Beijing and that will to a large extent determine how the international community acts.

There is no guarantee that the solutions offered either independently or jointly by the U.S. and China will always be in line with South Korea's interests and plans. As a new era dawns, Seoul's diplomatic strategies must change. It is time to go beyond the single-track approach and come up with a multi-layered plan.

U.S. President Barack Obama, in a joint press conference with his Chinese counterpart Hu Jintao in Beijing on Tuesday, said he told Hu "how appreciative I am of China's support for the global nonproliferation regime as well as the verifiable elimination of North Korea's nuclear weapons program." He added North Korea must choose "if it wants to continue down the path of confrontation and provocation that had led to less security, less prosperity, and more isolation from the global community, or it can choose to become a full member of the international community, which will give a better life to its people, by living up to international obligations and foregoing nuclear weapons."

But Chinese newspapers and broadcasters including the official Xinhua news agency merely reported that Obama "appreciated China's positive support for the resolution of the nuclear issue on the Korean Peninsula." By contrast, they faithfully reported what Hu Jintao said in the press conference.  

Over 2,000 newspapers are published in China, and each province has numerous television and radio channels. Yet for news like the joint press conference, all the media are supposed to copy the Xinhua reports. Obama's message echoed only inside the venue. Does he realize this?

What matters for South Korea is how to live in a new world order dominated by China and the U.S. They claim that the U.S. and Europe is calling it that just to keep it in check. Premier Wen Jiabao also said in May, "The contention that China and the United States constitute a 'G2' is not only groundless but also absurd." 

China has many problems not only in terms of economic might but also in terms of other areas like politics and press. We could suffer if China becomes a superpower merely on the strength of its economy, unaccompanied by improvements in civil rights, political activities and freedom of press. How can we be sure that our voice is heard?

With that in mind, let's take a look at the North Korean issues mentioned in the joint statement. "We agreed on the importance of resuming the six-party talks as soon as possible," it said. "Both of us remain committed to resolving the nuclear issue on the Korean Peninsula through dialogue and consultation. Such a commitment serves the common interests of China and the United States and all other parties concerned."

While the six-party talks were underway, North Korea carried out two nuclear tests in a bid to be recognized as a nuclear power. Partly thanks to China's persistent mediation, the North is soon to conduct a bilateral meeting with the U.S., a long-cherished ambition since the days of former leader Kim Il-sung.

Is Seoul only parroting the Chinese or American line when it says the six-way talks are the best way forward or that there is no problem with U.S.-North Korea talks? We need to give serious thought to what the statement really means.

By Park Sung-joon from the Chosun Ilbo's News Desk