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By AsiaToday reporters Kim Yoo-jin, Kim Eun-young, PD Kim Yoo-min =

Prof. Emanuel Pastreich, the senior advisor of AsiaToday, interviewed Kim Hae-sun, CEO of Suntransglobe and Korea-China relations specialist, on the structure of the central government in the People's Republic of China as well as the culture and other features of its importants cities on Feb. 2. As a director of the Korea-China Friendship Association, Kim has been consulting companies who want to do business in China for many years.

Now "Prof. Emanuel Pastreich's 3-Minute Talk" is going to take a new turn with a brand new title, "Prof. Emanuel Pastreich Talks About East Asia", in efforts to take an in depth-look at issues surrounding East Asia.

EYP: Hello, it's Emanuel Pastreich,  Today, we're going to be speaking with Kim Hye-sun, CEO and China expert, a little bit about China's political system and its implication for the economy and also local economy in China.
Let's start with actual administration, the central government of China. We having coming up next month two important meetings in China - The Chinese People's Political Consultative Conference (CPPCC), and the National People's Congress (NPC). Tell us little bit about the structure of the Chinese government and the importance of next month meetings.

KHS: Yes. As you know, the total population of Chinese people are 1.3 billion and we call that Chinese political system is like a pyramid type. Underneath this 1.3 billion population, there are 3,000 representatives of National People's Congress (NPC). As you have rightly pointed out, at the beginning of every March, there is a big conference gathering these representatives of the NPC, where they would talk about various different sectors that the central government is planning. So this is kind of a legislative body to make approval of all the agendas that central government is planning. So it's very important period for Chinese government.  

EYP: Right. There are some historical significances to the meeting this year and the planning for the future in terms of the so-called "Dream of 100 years", the vision for what China can be. Maybe say a few words about what that vision is and what's so important about this 100 year-commemoration.

KHS: By 2021, China will mark the 100th anniversary of the establishment of communist party. In 2049, it will be a 100th anniversary of the new People's Republic of China. Since Mao Zedong, Deng Xiaoping and other leaders of the Chinese government until Xi Jinping, the current leader, they have been planning the 100 year project. Every 5-year term, they have the economic planning. Before Xi Jinping Era, their economic development rate was over 10% every year. But just before Xi Jinping Era, they couldn't maintain that rate. So they had to satisfy at the rate of 6-7% annual growth. This means that compared to before, they have to concentrate on the distribution side and the organization of people from rural area moving to the city area. Also they are concentrating on the consumption, service sector, and all the advanced sectors. That is very different trend that China is facing at the moment.

EYP: There's of course, part of the change has to do with the backgrounds of many leaders. We have previously many people in the engineering, political sciences. In the case of two central figures, Chairman Xi Jinping and Premier Li Keqiang have backgrounds in economics, and law. How do you think that changes the way they look at the world?

KHS: As you know, they have created the Asian Infrastructure Investment Bank (AIIB), which is centering around China. Also, they have participated in IMF's SDR basket of currency. So I believe they were very shocked after the US economy crisis in 2008. So they have decided to bring RMB currency into major currency level together with US dollar, Euro, Yen, and British Pound. So this is kind of a turning period for China to move from traditional industries to service sector.

EYP: Traditionally, Korea has been strongest in semiconductors, smartphones, and display fields around the world. However, recently with Alibaba playing in the United States and Xiaomi  globally in the smartphone market, China has made tremendous progress. What is your feeling about prospects for China and what will Korea have to do to go forward? 

KHS: Korea has been very proud to be the leader in the IT side. Since 2014 when Alibaba listed their company in the New York stock market, they have raised more than $200 billion. Not only Alibaba, but Tencent, whose major product is WeChat. 

EYP: I use it and I have friends from United States and other countries as well.  

KHS: So it's kind of a very big threat to Korea, but maybe it's not comparable because the market cap of Chinese major leading companies like Alibaba, Tencent, and Xiaomi are ranking on top and major IT company in Korea like Samsung ranked no. 5 in its market share. So it's very important for Korean companies to target the tier market in China, especially in terms of IT service sector connecting major Chinese IT users or to do with smartphones is very important to develop a new business model to be successful in Chinese market.

EYP: You've had a lot of experience in different parts of China. Any comments about how are some of the differences in terms of business culture between different areas?

KHS: Actually I have been traveling to major cities such as Beijing and Shanghai, but as much as I've been traveling to Shandong province, which has 100 million population. Many people know much about China especially the major cities like Beijing and Shanghai. But even between Beijing and Shanghai, there's a very big rival culture. For example, Beijing is a political center and the center for many other things. But before, Shanghai was a financial center but since Xi Jinping's Era, also leaders are from Tsinghua University and Beijing University.
On the other hand, in case of Shandong province, as you know it's a birthplace of Confucianism. Between Korea and China, we share the same culture of Confucianism. The major characteristic of Confucianism is that you want to make some human relationship before you make some business relationship.

When we meet first, we have some dinner together. So once you become familiar with each other, then you talk about business.

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