Assessing the movements of people and goods in the strait zone

Chapter 3

The Assessment of the Inter-local Cooperation Efforts

in Fukuoka tended to visit Seoul and people in Busan tended to travel to Tokyo and Osaka. Since 1999, however, there has been a very sharp increase in passenger transport. This is supported by the service of high-speed boats and ferries connecting Fukuoka and Busan. A high-speed boat, named “the Beetle,” entered into service between Fukuoka and Busan in 1991 and the increased number of high-speed boat operation resulted in an increase of the passenger transport between two cities since 1998. Visa-exempt treatment for Japanese since 1994 and the 2002 World Cup Soccer Games also pushed up the number of the passengers traveling to Busan. In 2003, the total flow of passengers by air and boat reached 820,000. Since the Korean dramas and films such as ‘Winter Sonata’ are booming in Japan, more visitors from Japan to Korea are expected in coming years.

Figure 3.1 Passenger Transport Volume between Northern Kyushu / Yamaguchi and Busan by Type of Transport

100 200 300 400 500 600 700 800 900

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 (Unit: one thousand people)

Shimonoseki-Busan (Kanpu Ferry)

Fukuoka-Busan (High-speed boat+Ferry)

Fukuoka-Busan (Airplanes)

Kokura-Busan (High-speed boat)

Note: Combined volume of Fukuoka Airport, Port of Hakata, Port of Kokura and Port of Shimonoseki

Source: JR Kyushu

The increasing number of visitors across the sea is not just one-sided from Japan. More Korean passengers are seen to visit Japan. For example, the number of passengers carried by the Beetle increased from 17,000 in 1998 to 105,000 in 2003, which means a six-fold increase over a six-year period. This is re-flected in the dense networks of sea and air connections developed over time between Kyushu and Korea (as shown in Figure 3.2). In 1990, approximately ten thousand Koreans came to Kyushu and the number reached to about 250,000 in 2002, which is a 2.5 times increase.

Figure 3.2 Passenger Transport Networks connecting Kyushu and South Korea

Seaways

Airways Miyazaki

Kagoshima Kumamoto

Kokura

Nagasaki

Shimonoseki

Fukuoka

Oita Cheju

Tsushima Pusan

Ulsan Seoul

The short distance between Fukuoka and Busan, which is only 200 kilo-meters apart, takes only three hours by high-speed boat and less than one-hour by plane. As business and tourism expands across the sea, one can expect more visitors traveling between Japan and Korea. Still, there is more Japanese visiting Korea than Koreans visiting Japan. If visa requirements are removed or simplified for Koreans, more Koreans are expected to cometo Japan. It’s quite important for the two countries to deal with the issue of visa requirements as early as possible.

1.2 Increasing Movement of Goods

Figure 3.3 shows the trend of the throughput of container cargos for Korean routes at sea ports of Kitakyushu and Hakata port. Since the year 2000 when the Asia financial crisis was over, imports and exports have in-creased dramatically. Exports have quadrupled and imports tripled in the past 10 years. Transport of goods across the strait has increased remarkably as passengers has done.

Also, Fukuoka has enhanced its position as a Japanese gateway for imports from Korea. As shown in Figure 3.3, Fukuoka imports more from Korea than it exports to Korea. Although Korea has a large trade deficit vis-à-vis Japan, the trade imbalance in terms of freight from a local point of view indicates a different situation. Fukuoka has a deficit in trade vis-à-vis Korea. Imports from Korea in Fukuoka account for 8 percent of Japan’s total import value from Korea. Since the Busan-Shimonoseki ferry line also carries export-import cargos, the Yamaguchi prefecture, besides Fukuoka prefecture, plays an important role in importing goods from Korea. When Fukuoka and Yamaguchi prefectures are combined, their imports from Korea account for 17 percent of the Japanese total imports from Korea. Thus, ferries are a very important means of transport. If a Japan-Korea FTA is going to lower tariff rates, reduce non-tariff barriers or expedite customs

clearance procedures, the northern Kyushu and Yamaguchi area will enhance their importance as a gateway for trade between Japan and Korea.

Figure 3.3 The Volume of Container Freight Transport via the South Korean Sea Route

585 716

1,033

1,203 1,217 1,241 1,406

1,757 2,021

1,884

232 429

750 635

372 347 350

701 766 977

0 500 1,000 1,500 2,000 2,500

93 94 95 96 97 98 99 2000 2001 2002

(Unit: thousand tons)

Import (South Korea→Fukuoka) Export (Fukuoka→South Korea)

Note: Combined volume of freight handled at Port of Kitakyushu and Port of Hakata

Source: “Kyushu no Butsuryu (Transport of Goods to and from Kyushu),” K yushu District Transport Bureau

The current composition of export and import goods at the Fukuoka prefecture reveals that electrical machinery such as semiconductors is the main export item from Fukuoka. The main destination of semiconductors is not the southeastern Korea because semiconductors are mostly transported by air from Fukuoka airport to Incheon airport. Other main export items are general machinery, metal and metal products, chemical products, and

transport equipment, most of which seem to be shipped to the southeastern Korea.

On the import side, Fukuoka’s main import item is machinery and equipment, which is semiconductor-related. The departure point of these import goods may be Incheon airport. Other import items such as foodstuffs, textile and textile products, and metal and metal products are very likely to come from Busan by sea route.

Although semiconductor is the most important trade item between Kyushu and Korea, it should be noted that ‘intra-industry trade’ in other categories of goods has been increasing as well between Fukuoka and Busan.

What is important now and perhaps in the future is the import and export of food items at the Fukuoka prefecture. Fukuoka’s import of food items from Korea is higher than the national average. The Japan-Korea FTA would have more significant impact on the Fukuoka area than on the national average in terms of primary products and food items.