(^476) THE WEALTH AND POVERTY OF NATIONS
been so mobile. In the 1980s, foreign direct investment (FDI) by in
dustrial nations was growing five times faster than world trade, ten
times faster than world output; and even when these flows slowed in
the 'nineties, FDI to the developing countries kept growing.^5
In this way, investment and technique have cascaded from country
to country, with wages rising accordingly. The Koreans moved into au
tomobile manufacture with orders and technical assistance from Amer
ican firms hard-pressed to meet Japanese competition. The Swiss and
Japanese contracted for watches and parts made in Hong Kong, then
in Malaysia. Japanese (NEC, Sony), European (Philips, Rollei), and
American (G.E., Seagate Technologies) multinationals have made Sin
gapore a world center of electronics and photographies, while Hong
Kong, where refugee labor could once be had for a low wage and a pal
let to sleep on among the machines, is busily setting up plants and
leasing work in mainland China. Singapore has outsourced for tele
phones in Malaysia and the Philippines.
No economy is too advanced to be penetrated, no wall too high. By
late 1996, more than thirty Korean companies had manufacturing
units in Britain. Wales was congratulating itself on "revitalisation" by
foreign, largely Asian, investors, and five thousand people applied for
three hundred jobs with the first Korean company to come in. Other
European countries are less hospitable. In France, the Korean con
glomerate Daewoo Electronics agreed to take over the consumer elec
tronics branch of the French firm Thomson Multimedia. This would
have put it ahead of Sony as the world's biggest maker of TV sets,
which Thomson had been selling under the RCA label. The deal
aborted. The Koreans were furious.*
In choosing investment targets, wage levels are clearly decisive, but
- On Wales, see The Times (London), 6 January, 1997, p. 40. On Daewoo: Int.
Herald-Tribune, 18 October 1996, p. 20; 19-20 October 1996, p. 15. Daewoo got
its slice of Thomson for a symbolic one-franc piece, but the gift came with a load of
debt. (The French government is trying to reduce its deficit to pave the way for entry
into the new currency union.) As of December 1996, however, the deal was off.
French opponents of foreign invasion made much fuss about the symbolic franc, but
said litde or nothing about the debt. In pulling out, the French government tried to
hide behind the European Community, but fooled nobody. In Korea, people speak of
French racism—if it had been an American buyer, no trouble—and the Korean gov
ernment calls French bad faith (xenophobia) "a national concern." "France cannot be
trusted." Int. Herald-Tribune, 6 December 1996, p. 1; 9 December 1996, p. 13; 15
January 1997, p. 11. Note, however, that Korea itself is notoriously hostile to foreign
ownership. A tale of Eastern pot calling Western kettle black. Even so, Daewoo may
still be interested.