Quite a number of South Korean companies have set up shop in Kaesong Industrial Park, right over the DMZ in North Korea. There's 100+ factories employing more than 40,000 workers. There's buses going across to South Korea every day, though obviously they get cut off in times of tension. I don't think LG does anything directly at Kaesong, but there's certainly other electronics manufacturing going on there: 13 firms in total produced $59 million of electronics at Kaesong in 2010. Of some relevance to this discussion, Magic Micro has been making lamp assemblies for LCD monitors there since 2006. In short, it's not just canvas sacks and artificial flowers coming out of labour camps.
http://www.fas.org/sgp/crs/row/RL34093.pdf
No doubt, in any supply chain, the highest value-added steps are not occuring in Kaesong. As pointed out by others, labour costs can't explain the difference of hundreds of dollars on these monitors and so samstave's guess is likely wrong (though I don't think he deserves to be downvoted into oblivion). But companies don't decide to locate at Kaesong for cost reasons anyway; rather, they're there for nationalistic reasons about promoting reunification. The factories there apparently don't even break even in the absence of South Korean government subsidies, and the future of those subsidies is uncertain:
http://koreajoongangdaily.joinsmsn.com/news/article/article....
(Another slightly more complex point is that companies manufacturing products at Kaesong likely have to accept lower margins on them --- exporting them runs into sanctions issues in many countries, meaning they have to be sold in the domestic market --- but I doubt that's what's going on here to make these monitors so cheap either).
No doubt, in any supply chain, the highest value-added steps are not occuring in Kaesong. As pointed out by others, labour costs can't explain the difference of hundreds of dollars on these monitors and so samstave's guess is likely wrong (though I don't think he deserves to be downvoted into oblivion). But companies don't decide to locate at Kaesong for cost reasons anyway; rather, they're there for nationalistic reasons about promoting reunification. The factories there apparently don't even break even in the absence of South Korean government subsidies, and the future of those subsidies is uncertain: http://koreajoongangdaily.joinsmsn.com/news/article/article....
(Another slightly more complex point is that companies manufacturing products at Kaesong likely have to accept lower margins on them --- exporting them runs into sanctions issues in many countries, meaning they have to be sold in the domestic market --- but I doubt that's what's going on here to make these monitors so cheap either).
For those who are interested in this kind of stuff, the blog http://www.nkeconwatch.com/ makes good reading