Can New Zealand get a taste of the South Korean miracle?
Friday, 31 October 2025
GJEONJU, SOUTH KOREA | OPINION: Everyone you see on the streets around the Apec summit is weighed down with tote bags full of free stuff.
South Korea is using its brief moment as the centre of the universe ‒ with the world’s most powerful politicians, scores of CEOs, and of course the thousands of journalists accompanying them ‒ to show off.
The bags are from Matin Kim, a fashion brand with explosive growth across East Asia, whose more famous totes retail about NZ$176. They are filled with creams and face masks from Olive Young, a 25-year-old beauty brand with over 1300 stores, and delicious baked goods branded with K-Pop Demon Hunters, the Netflix smash that anyone with a child is more than aware of. But you don’t have to be here to get a taste of South Korea - the screen you are reading this on is quite likely to be Korean too.
South Korea’s massive success in making things other people want to buy goes some way to explaining our booming partnership with the country. They are now our fifth-largest trading partner, and Prime Minister Christopher Luxon signed a ’comprehensive strategic partnership’ with his counterpart here on Thursday which he says will make the South Korean conglomerates he has met up with over the last few days even more eager to buy what we are selling.
So what are we selling them? Largely, things that we grow in the ground and barely modify, like milk, meat, and wood, while they sell us back products they have made themselves, like cars, gadgets, and refined petroleum. Government officials call this trade relationship “complementary” - which it likely is, but the complements seem to be going a bit more to South Korea.
It is now a richer country than New Zealand on purchasing power parity basis, which is remarkable when you consider that as recently as the 1950s it was one of the poorest countries in the world following a devastating war, about 10-15 times poorer per person than we were at the time. Harvard’s “complexity” index, which looks at the sophistication of a country’s exports, puts South Korea at number 2 in the world, while we come in at 68th.
Luxon believes we have much to learn from South Korea ‒ he says he studied it, alongside other “small advanced economies” for the last 30 years, and there were five replicable things: A world class education system, more value-add to products through science and tech, getting rid of red tape, modern and reliable infrastructure, and “more trade and investment”.
He didn’t mention something that we aren’t about to replicate: A gigantic amount of US aid money poured in during the middle of the century to make sure communism didn’t spread from the North, about twice as much for this one country than all of Africa received over a 30-year-period. He also didn’t mention just how much the (not always democratic) state directed a lot of that economic growth, through protectionism, enforced low wages, currency devaluation, and massive subsidies for the champion “chaebols” that are now household names.
To be fair, it was a brief question in a stand-up, not a history thesis, so let’s take those five in turn.
On education, South Korean students certainly manage to beat ours in tests, but the country also spends almost twice as much per student. (We have a far younger population than they do, making boosting education spending more expensive for us.)
On “value adding” through technology, we can look away from public spending and into research and development (R&D). Both countries are outliers. South Korea spends more than anyone on R&D ‒ 5.2% of its GDP in 2022 ‒ while we spend far less than most of our peers ‒ about 1.5%. Scale is obviously a big help here, but it’s not everything.
Scale is also a big factor when comparing our infrastructure, but it doesn’t exactly excuse New Zealand. Two South Korean cities of a similar size to Auckland have a subway system, and it appears that they know how to build new projects that are on time and don’t see their costs spiral incredibly.
On gathering more trade and investment, South Korea seems to be better at actively seeking out foreign investment, but we seem to be a bit more open to trade generally.
Finally on the cutting of red tape, one imagines New Zealand has an edge already. I had to fill out a paper form telling the South Koreans every country I have visited in the last 10 years to get a visa, and New Zealand easily beats South Korea on “ease of doing business” surveys. On the other hand, the Prime Minister visited an outpost of New Zealand’s “Skyline Luge” brand in Busan where an entire hill had been moved to make the track, something that is hard to imagine happening anywhere in Aotearoa.
Looking through all these differences, you start to understand why our officials use the word “complementary” to describe our relationship ‒ we are simply never going to become South Korea, and the road to being anything close to them would be incredibly difficult for governments of any hue. And it’s not like South Korea is without issues of its own: from a birth rate half our own to stark inequality to a failed self-coup attempt last year.
Still, it’s easy to understand the allure South Korea might hold for Luxon. Asked what the products he would put into a goody bag if New Zealand was hosting Apec this year would be, his only answer was one we invented all the way back in the 1950s: The Pineapple Lump. Surely we can do better than that.