What's wrong with China? *edit*

edit: 08/30

I earlier alluded to Chinese currency manipulation and I guess I'm sharing why I feel so ambivalent about China.

But, by far, the  most troubling, worrisome, and, downright outrageous aspect seems to be how as the rest of the world is recovering from a great recession, China has turned to gloating over how it is now "China's turn" to lead the world rather than seeing how the absorption of the country's products and merchandise had and has lifted millions of her people out of absolute poverty or subsistence living standards . Rather than returning this assistance in kind -- and showing the rest of the world, what a rich and prosperous China is capable of, the Chinese government seems intent to shy away from helping these very same countries recover from a recession or even trading with these countries on fair terms. 

China earlier in the year agreed -- as the rest of the world was facing a slump in demand China's economy continued to be in double digits as  its "reserves" passed $2 trillion -- to slowly change the value of the Chinese Yuan. Well, if you think about it, this is by far the most egregious act that has China has committed. How can a country that is now the second largest economy and poised to be the largest exporter justify unfair trade advantages, especially with $2 trillion in "reserves." This is outrageous.

iMarketNews:

The yuan has seen increased volatility in the trading days since the PBOC's [People's Bank of China] June 19 pledge to increase exchange rate flexibility. The yuan has risen by 0.37% since that pledge was made.

I'm not quite sure how old the author of this article is, but for someone, who is still in his twenties, I've aged more than 0.37% over the past four months.

Anyways, the reason that I write about this is that, well, every article I read as of late has much to do with the ails of the economy, and there seems to be much in the realm of U.S. domestic politics and China that really, well, vexes me. 

There seems to be so many people out of the work force and for such a long period of time that it looks like it has become observable. I mean this is pretty alarming stuff. Consider that there are so many people out there that have gotten laid off or lost their jobs over the past couple of years and have not been able to find work for such a prolonged period that people can observe this as something beyond the anecdotal. and it may have brought about long term structural changes to the US economy (and along with it a lower potential economic prosperity for a long run -- maybe not the long run.)

But, what's more disconcerting is that there seems to be a strangely timed, but definitely newly found apprehension towards U.S. budget deficits in the far flung future. (One of the few sectors that seems to have added jobs as of late is the health care industry.) This newly found apprehension looks as if it will lead to a paralyzed federal government that will lack the ability to engage in any new policy initiative. I strongly believe there needs to be working majorities in both senses of the word, "working majorities" for something to be done, yet it seems the U.S. public has no appetite for this.

I guess a good example that captures my concerns is this entire mosque building issue. Why is this issue capturing so much attention in the press over what little attention and patience  a disappointed and  apathetic U.S. electorate has left. The issue seems to have crossed over from being a traditional debate over the role of the government and into one that is now being manipulated as a regular wedge issue. Furthermore, the Federal Reserve seems to have run out of its conventional tools to stimulate the economy and is looking a bit reluctant to use its more unconventional tools to stimulate the economy.

If the U.S. is facing problems at home, then it would be quite natural to look over and see what if her friends could help, say in the manner that U.S. leadership helped bring about export-led recoveries in East Asia in the aftermath of financial crisis in 1997-98 over there. Currently, with Europe being well Europe, I mean this in a way as in pretty undependable, and aside from super loyal Japan, there pretty much is only one large economy remaining -- booming China. By the way, India doesn't really count yet. But, this remarkable contrast between a booming China with $2 trillion in "reserves" refusing to abandon its currency manipulation techniques is just unacceptable. I mean something needs to be done. 

Now, I'd think it might be a bit disrespectful to not credit Chinese people for continuing to develop their country, but for some time now, the U.S. and the West wholeheartedly embraced China that made much of what China has achieved possible. China has about $2 trillion in "reserves" for lack of a better word, I guess. So, this is where I'm coming from when I earlier said the "most troubling, worrisome, and, downright outrageous" development in China is its refusal to take on any responsibility even to the point of abandoning an unfair trade advantage as its economy is booming. 

Now, I'm a believer in that countries don't treat each other in the manner that people have come to treat each other and it is within this sense that I think China is doing something that is simply against her interests. Economic benefits notwithstanding, I think China's single-minded quest to be a superpower at all costs is creating enemies. For example, returns on investment from government spending on defense seems to be added insecurity for not only the country --a la czarist Russia or the Soviet Union-- but also for the rest of the world. China seems to think good will  only comes from soft power, which comes from investing in English-language 24 hour cable news networks, but I beg to differ.

Dexter Roberts:

Lydia Wang, a 28-year-old marketing manager in Shanghai, gripes that the shoes and clothing she normally buys are at least 50 percent pricier than in 2009. Wu Sengyun, a 54-year-old retiree living in the coastal city of Ningbo, Zhejiang, says prices of fruit and fish are both up more than 20 percent. Willy Lin has cut back on serving free drumsticks in the canteen of his Jiangxi clothing factory as meat and vegetable prices climb. "The workers suffer," he says. "Everybody is crying."

Officially, China's consumer price inflation topped out at 3.3 percent in July from the year before—a 21-month high. The government says the spike is a one-off caused by crop damage in recent flooding. Other costs, they say, such as cars, mobile-phone bills, and clothing, are actually falling, and price increases should slow as the economy cools. At an Aug. 12 press conference, Pan Jiancheng, a deputy director in the statistics bureau, announced that the inflationary threat was "overhyped."

Many consumers, investors, analysts, and academics disagree.

[...]

Why does China need super cheap money right now? Exporting inflation would make China very popular, I bet, though I think it's just doing what it should have started on a long, long time ago.

Anyways, $2 trillion in "reserve" with 10% growth rates and still the need to engage in mercantile practices, it's quite vexing...

Note: I know today is the 100 year "anniversary" of Japanese annexation of Korea, but hey, this is what's on my mind right now.

Drama in Japan *add*

add: 08/27/10 the Japanese PM has vowed to take "bold" action against the Yen's appreciation.

I stumbled on this post as I read that Ichiro Ozawa will challenge the current Japanese Prime Minister, Naoto Kan -- they are both of the same ruling DPJ party. Naoto Kan became prime minister just two months ago as the previous DPJ prime minister resigned over the base relocation issue. Apparently, Ichiro Ozawa is very gaffe-prone and Andrew Joyce over at a blog at the WSJ online writes about this.  

Excuse the almost entire cut and paste. 

Andrew Joyce:

Step forward, Ichiro Ozawa, the kingpin of the ruling Democratic Party of Japan (under investigation for his role in a funding scandal): according to Japanese media (in Japanese), Mr. Ozawa Wednesday referred to Americans as — brace yourselves — “simple-minded”.

“I like Americans, but they tend to be simple-minded,” he said during a speech in the capital, using a Japanese idiom that literally means ‘monocellular’. He also offered some back-handed praise for U.S. democracy: ”I don’t think (Americans) are very wise,” he said, “but I highly rate their ability to put their choices into practice.”

Mr. Ozawa, who may stand for the DPJ presidency (and hence the job of prime minister) in elections next month, also said the election of Barack Obama as the first black U.S. president was something he previously thought “impossible” as he thought a black president “would have been assassinated”.

The U.S. Embassy in Tokyo declined to comment on the remarks.

This isn’t the first time the party heavyweight has put his foot in it. In November last year, he called Christianity “exclusive and self-righteous” and said that U.S. and European societies were at a “dead end”.

But Mr. Ozawa has some way to go before he can rival some of Japan’s most gaffe-prone politicians from years past, including former prime minister Yoshiro Mori, who used the panic surrounding the mooted millennium computer bug to highlight the differences between Japan and its key ally.

“When there was a Y2K problem, the Japanese bought water and noodles. Americans bought pistols and guns,” Mr. Mori said. “If a blackout happens, gangsters and murderers will come out. It is that kind of society.”

I forget that at times Japan is a pretty large, insular country and that Japan is after all a part of the colorful neighborhood that is Northeast Asia. By the way, I wouldn't at all be surprised if South Koreans made this statement say up until a decade ago. This is after all Northeast Asia. Nonetheless, this entry doesn't mention anything about the super crass former Japanese Prime Minister Junichiro Koizumi. I'm guessing the National Organization for Women -- was probably not his biggest fan.

Anyways, Michiyo Nakamoto of FT writes:

The last thing Japan needs with a surging currency and waning economic recovery is more political turmoil. But that is what it is faced with after Ichiro Ozawa, the heavyweight Democratic party politician, decided to challenge prime minister Naoto Kan for the premiership.

It's remarkable that Japan hasn't had a revolution yet. It must be difficult for a country that suffered unimaginable humiliation at the end of World War II and which thereafter prided herself on her economic prowess has just been eclipsed by China recently after two lost decades. The country also, probably out of deference to the West, has also refrained from actively managing her currency in the manner that say China has accorded herself as people seem to see the Japanese Yen as one of the safer currencies left in the world.

(Though it seems this may change)

Takahashi Hirokawa at Bloomberg:

Quiet Since 2004


Japan hasn’t intervened in the currency market since March 2004, when the yen was around 109 per dollar. The Bank of Japan, acting on behest of the Ministry of Finance, sold 14.8 trillion yen ($175 billion) in the first three months of 2004, after record sales of 20.4 trillion yen in 2003.

The pressure on Shirakawa comes as Kan faces intra-party competition from his most powerful rival. Ichiro Ozawa, whose campaign funding scandals forced him to step down in June as the DPJ’s No. 2 official, yesterday said he will run against Kan in the Sept. 14 election for party president. The party’s majority in the lower house of parliament ensures that its leader becomes prime minister.

Anyways, as the country has real (territorial) as well as imagined grievances with all her neighbors and lacks a peace treaty with both Russia and North Korea, let's hope the country does not move towards say how Japan was a century ago. The country has an enormous nuclear stockpile and an indigenously built rocket program.

Unification Tax

edit: for clarity
 
August 15th is a good day to be in East Asia, unless well, you're in Japan, where it's a day of national humiliation; it's the day Japan surrendered. South Korean President Lee Myung Bak's proposed Unification Tax on August 15th was noteworthy in that it forward looking. It was announced on a day when usually there would be calls for Japan to apologize for deeds that occurred more than half a century ago.

I think the statement reflects better bilateral relations with Japan more so than it actually has anything to do with unification at all. By the way, I did find the statement pretty funny in the sense that it just completely ignores North Korea existing as an independent actor and speaks as if the country has already gone under -- which in a sense it has.

Link to KCNA statement via One Free Korea. There seems to be no link that posting...

Exaggerating the China "Threat"

The Economist seems to have a couple articles that talks up the idea of China taking over the world as China recently surpassed Japan as the world's second largest economy in nominal terms. One of the articles suggests that China is by many measures the world's largest economy, such as by annual sales of passenger cars, and alludes to a time when the British Empire was in relative decline. But, I might suggest that this is a bit of a stretch. The British Empire, before the aggregate size of its economy was overtaken, was already being surpassed by the United States in industrial technology and Germany was pioneering a brand new industry, petrochemicals.

We no longer live in a world where countries are compared by its annual pig-iron output or by railway mileage. It's easy to acquire, mimic, and improve upon already existing technologies, but for a country to drive innovation is not easy. France, with its blotched Internet initiative and Japan with its blotched supercomputer initiative come to mind here. In the 21st century, I would like to suggest that the technological gap between the West and China/India is so vast that such comparisons may not be directly applicable. If the developed world were ever to engage in a land war with China somehow, then I believe the comparisons might be a bit more substantive in its content. 

Disclaimer: This post is of course a very American-centric view. If I were to say live on the Korean Peninsula or live in a country that borders China, or even on one of the islands that naturally encircle China, then China's astronomical rise in industrial output matched by astronomical rises in military spending, then my perspective may be not be as relaxed.

[Apple conquers Korea] iPhone 4 Pre-Orders Halts Korean Mobile Service Carrier...

Kushibo notes: 

KT's online ordering site for the iPhone 4 ground to a halt today. Apple and KT representatives assumed it was due to 70,000 people ordering the beloved smartphone, but it turns out it was a roving band of bored netizens randomly taking down a website in protest over Apolo Ohno existing on the planet.

Earlier, I commented on how years of South Korean government protection for the mobile phone market did not lead to the emergence of a  widely adopted mobile platform. I'm guessing South Korean telecom providers' reluctance to accept a phone that made use of WiFi, which had been a solid money making stream also comes to play here. 

But, to note how South Korean government protection -- by adopting a CDMA standard -- led to the emergence of globally competitive cellphone manufacturers, one needs to look no further than how well Motorola has done up until I believer very, very recently. They hold probably a fifth of the cellphone market in South Korea and I believe it's sales have for some time been larger than Samsung or recently dipped slightly below Samsung in, well, Samsung's "home" market. However, what is more interesting is a quick search on market share for cellular phones or mobile phones does not lead to a number of sites about hardware sales any more; all news now seems to focus on the market share of mobile operating systems...

Refuting the absurdity behind claims of the U.S. "raising tensions" in East Asia

Xinhua:  

The United States seems to be flexing its military muscles in Northeast Asia and the South China Sea for some time now, especially after the sinking of the Republic of Korea's (ROK) corvette, Cheonan, on March 26.

The United States -- and the author of this post -- do not have anything against the Chinese. It is a good thing that hundreds of millions of Chinese have been lifted out of poverty in large part due to the embrace of Communist China by the western world. However, along with this embrace comes the responsibility or expectation that China will soon thereafter become a responsible member of the world community.

China, often critical of past Japanese aggressions, seems to be moving towards a fascist, xenophobic, and ultra-nationalistic state herself. While China is technically "communist," one needs to look no further than North Korea, which has removed all references to communism in its constitution and has put a military first (선군) regime in its place, to see what communism has come to mean in Northeast Asia.

By the way, how does a country go from being a revolutionary communist regime to a hereditary fascist country in half a century. It seems that North Korea has gone so far to the left it emerged back to the far right? (I should reference B.R. Meyers here as I believe I read an interview somewhere where rather than North Korean politics being defined along a singular political spectrum stretching from right to left, it was described in a circular fashion. I may be wrong on the source here.)

But, anyways, to the meat of the argument, as China becomes more prosperous, the country should understand that the rest of the world embraced China not just to make a quick dollar or two, but also to assuage Chinese concerns that the west was out to prevent "China's rise." This argument was often used to support China's entry into the WTO. Since that time it is not hard, though it is hardly reported, as to how far China has deviated from these expectations. China's obstinate attitude towards global climate change, indifference towards terrorism in Afghanistan, and unwillingness to take a position against North Korea's murder of South Korean sailors for the sake of "stability" does bode well for seeing China to be a responsible country that respects her neighbors, let alone take on a position of world or even regional leadership. 

In particular, China's embrace of Myanmar's (Burma) brutal military dictatorship just to secure a port so that one day the country may be able to compete with India and the United States  militarily (or to secure its shipping lanes against a threat that does not exist) is outright ridiculous considering the extent to which China has prospered up until now. The extent to how absurd this is can be seen by how the world's largest democracy, India, has come now to embrace the military dictatorship in Myanmar (Burma) out of fears that the country will soon become a port for Chinese (eople's Liberation Army's Navy ships off India's borders. China's rising military spending is also raising concerns (and probably creating enemies) as its smaller neighbors nervously look on as China becomes ever richer and ever stronger. Furthermore, the Chinese also "invaded" the Spratly islands and regularly harasses firms that do business with other countries. 

But, by far, the  most troubling, worrisome, and, downright, outrageous aspect seems to be how as the rest of the world is recovering from a great recession, China has turned to gloating over how it is now "China's turn" to lead the world rather than seeing how the absorption of the country's products and merchandise had and has lifted millions of her people out of absolute poverty or subsistence living standards . Rather than returning this assistance in kind -- and showing the rest of the world, what a rich and prosperous China is capable of, the Chinese government seems intent to shy away from helping these very same countries recover from a recession or even trading with these countries on fair terms.

It is within this light that the military exercises in East Asia by the United States should be seen. The United States is not a belligerent that is out to get China, but when a country systematically ignores and disrespects the wishes of her much, much smaller neighbors and spends undisclosed sums on a naval military buildup that seems to serve no other purpose than to one day challenge or confront the United States, then it is no wonder that the United States will regularly send spy ships right outside Chinese territorial waters. (In contrast, the Chinese do not seem to respect the right of South Korea to stage military exercises to ostensibly demonstrate that North Korean provocations are not acceptable.) 

I downright reject the notion that the United States is raising tensions in East Asia. What is worrisome is that these types of "news" stories articulate a position that is flat wrong and is an extension of the propaganda arms of either governments, such as China, or, perhaps, the left in a divided country. It is no wonder that countries, such as South Korea and Vietnam, which both share deep cultural affinities with China are hedging their bets. China will not receive the respect the country wishes  or feels it deserves until it shows that same amount of respect back, including to countries that would naturally fall under its cultural and economic "sphere of influence."

So, I saw a wizard today...

I was walking down Telegraph Avenue in Berkeley today, and, well, I can swear I saw a wizard. He wasn't like one of those wizards from say Lord of the Rings, where he was dressed in all white with a long beard, but a wizard in truly Bohemian, Berkeley style fashion. But, naturally, it reminded me of this time I went to a fortune teller in Korea. Fortune telling is big business in Korea. There are even reports of past presidents, not sure of the current president, but past South Korean presidents consulting fortune tellers on important issues with perhaps nationwide consequences. I guess fortune telling is a huge part of traditional Korean Shamanistic beliefs though not in the way that, say, some Chinese may interpret the symbols on the South Korean flag. (The South Korean flag, while currently symbolic of a country of fifty million has traditionally been symbolic of Chinese fortune tellers.)

Anyways, I went to a very commercialized fortune telling place (COEX); the lady used all types of strange cards and asked me when I was born, what time I was born, and other details, many of which I didn't know or couldn't remember. She read my fortune anyways. I'm not sure if they always use cards, but it seems to be down to a science in that country where extravagant sums are spent to see the future. Well, I'm not sure what glimpses of my future the fortune teller saw, but I remember a card showing up with a figure that had a rather uncomfortable resemblance to that wizard from the Lord of the Rings. I don't see myself as a particularly superstitious person, so a card with a wizard on it didn't do much to make me take much of this seriously. On top of that, I couldn't decipher some of the words the fortune teller was saying as she was using many words that I was simply unfamiliar with.

But, one thing I do remember was that during the Year of the Rooster, I was told "to apply" and I would receive a favorable outcome; I applied to UC Berkeley that year.

A Sea Change in Attitude & Clumsiness of the Pentagon

A few years ago, when the late South Korean President Kim Dae Jung visited Washington, D.C. to meet with then U.S. President George W. Bush, Kim Dae Jung was utterly humiliated when the U.S. did not publicly support Kim Dae Jung's Sunshine Policy. George W. Bush was not a  very popular figure in South Korea.

(The memory of two drunk Korean men trying to incite a fight by asking whether I liked Bush in Korea a few years back will probably always be plastered to the back of my mind.) 

Anyways, after this public repudiation, which it essentially was, of Kim Dae Jung's Sunshine Policy, South Korea soon after experienced massive, nationwide Anti-American demonstrations from about the end of the 2002 through to the beginning of the current South Korean administration . The "causes" of these demonstrations ranged from  unfair Status of Forces Agreement (SOFA) to a more independent South Korean defense policy and, most recently, with respect to beef. 

I'm not at all suggesting that Anti-American demonstrations in South Korea were a direct result of the public repudiation of the Sunshine Policy, but it is something to consider, especially when there is an entire generation of South Koreans that largely equates authoritarian rule in South Korea with the U.S. (Somehow, totalitarian, 1984-esque North Korea can be overlooked.)

Anyways, what brings me to this is the "inflammatory" remarks made by U.S. Pentagon Spokesman, Geoff Morrel; he made the mistake of calling the East Sea, well, the Sea of Japan.

A couple weeks ago, the Korea Herald: 

A ruling party lawmaker sent letters Saturday to Secretary of State Hillary Clinton and Defense Secretary Robert Gates concerning the recent reference by a U.S. official to the East Sea as “Sea of Japan,” which has irked Koreans.

Rep. Won Hee-ryong of the Grand National Party, who chairs the parliamentary committee on foreign affairs and trade, sent them after Pentagon spokesman Geoff Morrell last Wednesday used the sensitive name while talking about where the South Korea-U.S. joint military exercise will take place.

Korea Herald: 

South Koreans were dumbfounded when Pentagon spokesman Geoff Morrell repeatedly called the waters the "Sea of Japan," not the East Sea, during a press briefing last week on a plan to hold joint naval drills with South Korea there.

While I find it to be absolutely absolutely hilarious that here is this Pentagon spokesman, who is announcing a plan to hold joint drills that demonstrate the vitality (I'd like to stay away from using the word solidarity) of the US-ROK alliance and U.S. support of South Korea's position,  that upsets enough of a country to get a South Korean legislator to write letters, I think it demonstrates to an extent how clumsy the Pentagon is. I personally find it to be border on the nonsensical that South Koreans could get so upset over what the naming of a body of water in other languages, but the ostensible purpose of the press release and the military exercises themselves were to show that the U.S. cares about South Korea. In this context, I think that the extent to which how South Koreans are so sensitive to the issue of the East Sea/Sea of Japan issue shows how clumsy the Pentagon can be. I mean anybody that even randomly by chance happens to fall upon news or events pertaining to South Korea, would realize how sensitive the East Sea/Sea of Japan and Dokdo/Takeshima/Liancourt Rocks are to South Koreans.  

But anyways, here is the sea change in U.S. sensitivity to how South Koreans may feel...

Yonhap:

"A joint statement to be adopted at the two-plus-two meeting includes the contents of South Korea-U.S. combined exercises in the East Sea and West Sea," the source said on the condition of anonymity. "As far as I know, they plan to describe the venues as waters 'off the east and west coast of the Korean Peninsula.'"

On a side note, it's often said that as the vast majority of Americans -- aside from the sheer advantage of possessing so many heritage speakers -- only speak English, it seems to be a case in point of yet another example of American ignorance. But, imagine how different the EU or India or to a lesser extent China or the Philippines (or Indonesia, etc) -- would all be if they all spoke the same mutually intelligible language or if the United States historically had neighbors that spoke  a language other than English. (As a bilingual speaker, I guess this more than hints at where I stand on ESL instruction.)

Military Exercises in the East Sea (Sea of Japan) and the Cheonan Incident in Review

edit:  Aug. 1st, 2010, for grammar.

Contrary to what many may be thinking, including Christine Ahn in a New York Times editorial:

In a move intended to punish North Korea for its alleged sinking of a South Korean warship, the Cheonan, the United States and South Korea are flexing their military might by mobilizing American and South Korean ships, over 200 aircraft, including the F-22 Raptor fighters, and 8,000 troops.

I highly doubt the United States would go to that extent to "punish" or show North Korea.anything. The United States doesn't need to send warships to intimidate North Korea; all the United States has to do is -- as Josh Stanton advocates -- enforce financial sanctions on North Korea for which the United States (and South Korea) lacks the will to do.

Considering the highly visible show of force and also within context of the United States taking a position on the Spratly Islands and the Obama Administration's very tough stance against Japan's push for a more independent Japan or equivalently a diminished U.S. role, it seems that the audience for all this is definitely not for North Korea or even China, but for all actors in East Asia. Additionally, with respect to China, it seems that unlike my earlier postings about how this is being used to push China to control North Korea, I have come to believe that the ultimate objective of the United States' military exercises is that while the U.S. may be caught up in a couple overseas entanglements and, also, the aftermath of the worst recession since, well, the Great Depression, the United States is using the Cheonan incident to re-assert the United States in East Asia.

There's more than a couple things that led me to this view. 

For starters, unlike Joshua Stanton, I do not believe that the United States is levying any type of real financial sanctions against North Korea. "One hundred" bank accounts is extremely vague and this indicates that this is primarily for domestic (North and South) Korean consumption purposes. Moreover, when considering that the United States has finally decided to take a position on the Spratly Islands -- it seems to be more than mere chance that for the first time in history both U.S. Secretaries of State and Defense -- while en route to an ASEAN Security Dialogue -- visited the DMZ together. All this seems that the U.S. has finally in place  a coherent policy in East Asia that encompasses more than a "quick fix." Furthermore,  consider that the current administration did not take lightly to Japan's proposals for base relocation. Finally, the sheer scale, size, and scope of the recent military exercises off the East Sea (Sea of Japan) seems to be the icing on the cake. 

Problematically, and this is where I might suggest that previous analyses of the naval exercises has overlooked is how relatively unimportant North Korea -- and, unfortunately, South Korea is to the United States. It seems support of South Korea's global initiative is there just to send Japan a message and the naval exercises are there just to show China -- and the rest of East Asia -- that the United States is committed to engaging the region. Also, I might add that the "financial sanctions" the United States is adding is there just for Korean (North & South) consumption. I do not believe that freezing one hundred "bank accounts" is anything beyond mere symbolism. 

I say this not with any elation at all and actually wish South Korea was more important to the United States for its own sake, but as in the past -- most notably, the Cold War -- South Korea is  and will be benefiting. The  United States is supporting the current South Korean administration's global initiative (e.g. G-20 summit), a stronger US.- South Korea military alliance, and, hopefully passage of the KORUS, which would  really  reinvigorate the US-ROK notwithstanding the economic aspect.  If current U.S. domestic political trends continue, then I would be that passage of KORUS is not that far off.

Initially I had intended to originally post on the scale of the United States deployment to the East Sea (Sea of Japan). However, while I was thinking about the deployment it led me to this posting. Just check out these pictures over at ROKdrop. The picture in the back is of the ROKN Dokdo or a South Korean "mini-carrier" that transports troops and helicopters -- I believe. The two hundred planes -- and the USAF's F-22  stealth fighter -- is a lot when considering that South Korea initially procured just forty planes when the country decided to purchase F-15K from Boeing. (I believe there was an extension in this contract or that South Korea will attempt to purchase the upcoming F-35's...) 

But, anyways, consider that there are seventy planes on the 97,000 ton U.S. aircraft carrier and that two hundred planes are involved. Also, there seems to be a recently built new, Virgina class U.S. attack submarine that seems to be on its way to be deployed over at Pearl Harbor -- that would make it the third deployed in Pearl Harbor and sends a direct signal to China's massive military buildup. Furthermore, the South Korean navy has been very busy recently as well. Involved in the exercises were most likely KDX I/II/III destroyers. I believe the KDX III destroyers are equipped with the anti-air AEGIS missile system. The KDX III destroyers are actually larger in tonnage than their USN counterparts that are largely armed with US technology. Of course, there was also probably a nuclear submarine and a U.S. AEGIS ship that went along with the U.S. carrier. So, yes, it definitely does look like a show of force, but reading up or checking out how large -- or expensive -- these U.S. and South Korean ships may be to get a sense of why the U.S. is doing this is not necessary. The pictures linked at ROKdrop is probably a good analogy of the situation.