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Korea Herald
20-07-2025
- Business
- Korea Herald
KCCI chief suggests EU-style economic bloc between Korea, Japan
Chey Tae-won says tie-up between neighbors in AI, manufacturing could be key to weathering global economic storm Chey Tae-won, chairman of SK Group and the Korea Chamber of Commerce and Industry, doubled down on his proposal for a Korea-Japan economic bloc that is akin to the EU, stressing that the two nations must strengthen cooperation in AI and manufacturing sectors as global economic uncertainties intensify. Envisioning a bloc that would unite the two neighbors — both grappling with stagnant domestic economies, aging population and rising global trade barriers — Chey has been advocating such a union would create a $6 trillion economic zone, making it the world's fourth-largest economy, one that would be better places to combat these shared challenges. "The question is: Is Korea okay the way it is? If not, we need to explore new options that we have never tried before," Chey told reporters during a press conference Thursday on the sidelines of the 48th KCCI summer forum held in Gyeongju, North Gyeongsang Province. 'A Korea-Japan economic bloc could be one of those options, and it can grow into a community like the EU,' he added. Chey acknowledged the proposal may meet with mixed public sentiment, but noted that many Japanese business and political leaders he met were not opposed to the idea. He met with Japanese Prime Minister Shigeru Ishiba in May, advocating for deeper economic cooperation between the two countries. 'Japan thinks a lot more in terms of economic security and it is my understanding that Prime Minister Ishiba is also putting a lot of efforts and interest into it as well," he said. Chey pinpointed artificial intelligence and manufacturing as two critical areas where Korean and Japanese expertise could combine forces. 'To do AI well, we have to join hands with Japan and exchange data with each other,' he said, noting Korea's domestic industry, manufacturing scale and data alone are not big enough on their own. 'When Korea and Japan combine data together, we can even achieve at least some competitiveness," he said. 'There are many issues South Korea cannot resolve alone.' He believes AI could be the very key to tackle Korea's dwindling manufacturing industry. 'In this era of AI, if Korea fails to rebuild its manufacturing industry through AI, a large portion of Korea's manufacturing industry could be wiped out within a decade, he said. 'It's a grim scenario, but AI is our only hope at this point.' Chey raised alarm over China's rapid adoption of AI. "In AI, China is catching up and applying it faster than we are. Korea needs to catch up as soon as possible to stay competitive," he said. On the domestic front, Chey called for efforts to scale Korea's AI ecosystem, including the development of infrastructure, the cultivation of talent and the nurturing of a vibrant startup environment. 'What I want to ask the government is this: Create a market. We need public sector-led AI projects," he said. "Once these projects are launched, startups, mid-sized firms and large companies can all participate and make something. That's how we can increase the number of people with experience and training in AI." To that end, infrastructure is critical, he added. 'We need to make many applications for accessible AI, but more importantly, we need the infrastructure to support them, like AI data centers with GPU capacity," he added. Such resources should be publicly available for startups and SMEs to train AI models and develop practical product. Chey, who is hosting the upcoming APEC CEO Summit in October in Gyeongju, said he hoped the event would promote international cooperation not only in AI, but also in solving broader challenges such as trade issues. 'One thing I would like to see come out of APEC is a clear solution to the tariff issues,' he said but adding it would be ideal if the matter could be resolved before the summit. 'If tariff issues are resolved, it would be a strong signal that economic threats are easing. Beyond tariffs, Chey said he expressed home for new types of cooperation in AI, semiconductors, shipbuilding, steel and automobiles. Chey said he is putting all out efforts to invite many global business leaders to the upcoming meeting. "Our approach now is to ask the (leaders) who they want to meet when they come to Korea," he said. "If they believe they can meet someone important to them here, the likelihood of attendance will increase. Because ultimately, they need a clear reason to come."
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Korea Herald
16-07-2025
- Business
- Korea Herald
[Photo News] KCCI forum kicks off in Gyeongju
The Korea Chamber of Commerce and Industry kicked off its annual summer forum Wednesday at Lahan Select Hotel in Gyeongju, North Gyeongsang Province. The annual forum, which runs through Saturday, is one of the largest economic gatherings in the country, with this year's edition attended by some 500 corporate executives, businesspeople and policymakers. The event is being held in Gyeongju to help secure public interest and support ahead of the APEC summit and the APEC CEO Summit, set to take place in about 100 days in the historic city, according to KCCI.
Korea Herald
03-07-2025
- Business
- Korea Herald
[Editorial] Sandbox, not straitjacket
To reclaim economic dynamism, South Korea must trade patchwork fixes for deregulation South Korea has long prided itself on its technological sophistication, a nation of 5G networks, semiconductor giants and integrated mobile ecosystems. Yet the legal and regulatory machinery governing its economy remains ill-suited to the demands of the industries it claims to champion. A modest but telling countermeasure has been the 'regulatory sandbox,' a policy tool that grants temporary exemptions from outdated laws, allowing innovative companies to test new services or products without being immediately stifled by red tape. Introduced in 2020, the system has yielded tangible, if limited, results. According to the Korea Chamber of Commerce and Industry, 518 firms that participated in the scheme between 2020 and May 2025 created 6,900 jobs and added 980 billion won ($722 million) in revenue. Most were small and medium-sized enterprises, underscoring how heavily rigid rules weigh on those least able to manage them. Yet the sandbox remains the exception, not the norm. Its impact is curbed by slow-moving bureaucracy, narrow scope and weak follow-through. Despite promising signals, successive Korean governments have failed to convert ad hoc relief into systemic reform. The global trend toward deregulation makes South Korea's regulatory stagnation even more conspicuous. Europe, once a champion of corporate oversight, is now retreating from some of its more burdensome interventions. France and Germany have jointly pressed the EU to shelve its proposed Corporate Sustainability Due Diligence Directive, citing the competitive strain it would impose. The EU is also reconsidering its approach to AI regulation, increasingly concerned about falling behind the US and China in strategic technologies. Emerging markets are acting just as decisively. Vietnam, for example, aims to cut corporate regulation by 30 percent in pursuit of an 8 percent growth target. South Korea, by contrast, is tightening legal frameworks just as its peers seek flexibility. The cost of this approach is no longer speculative. In the 2025 competitiveness rankings by the International Institute for Management Development, South Korea fell seven places to 27th overall. More strikingly, it dropped 21 places in the 'business efficiency' sub-index, a decline driven by lower productivity, reduced corporate adaptability and mounting internal hurdles. This is a clear warning that the regulatory environment is not merely lagging but actively undermining competitiveness. The drag on emerging industries underscores the risks. Drone logistics, autonomous driving and telemedicine — sectors advancing rapidly elsewhere — remain mired in legal uncertainty at home. The case of Tada, a homegrown ride-hailing platform hit by legislative hurdles, offers a cautionary tale. In South Korea, innovation is often not outpaced by the market but obstructed by the state. One proposal that warrants serious consideration is the 'mega sandbox,' a plan to let local governments establish experimental regulatory zones for high-potential sectors such as urban air mobility or AI. Backed by the KCCI and business leaders, the idea represents a step toward structural reform. But real change will require more than decentralization. It demands political willingness to tolerate risk, loosen central control and embrace a culture of experimentation. President Lee Jae Myung has pledged to eliminate rules born of administrative convenience rather than public need. Yet the country's recent history is littered with unfulfilled promises of reform. Regulation is not inherently counterproductive. Well-crafted rules protect markets, consumers and institutions. But frameworks that persist out of habit do more than hinder efficiency — they dissuade ambition. In a global economy defined by speed, adaptability and innovation, South Korea cannot afford to remain an economy where the space to imagine is narrower than the rules that constrain it. Policy must do more than referee. It must create the space to play.
Korea Herald
19-06-2025
- Business
- Korea Herald
S. Korea suffers OECD's 4th-biggest AI brain drain
South Korea, despite being a leading producer of educated professionals in artificial intelligence and science, is rapidly losing talent to countries such as the United States, Canada, Japan and Germany, according to a new report released Wednesday by the Korea Chamber of Commerce's Sustainable Growth Initiative. In 2024, South Korea recorded a net loss of 0.36 AI experts per 10,000 people. That puts it near the bottom of the 38 member countries of the Organization for Economic Cooperation and Development, at 35th place. Luxembourg, by comparison, gained 8.92 persons per 10,000 people. Germany gained 2.34 and the US 1.07. This measure subtracts the number of local professionals leaving the country from those coming in. In Korea's case, the gap is growing wider every year. This trend marks a reversal from what had been a modest but positive inflow of AI talent into South Korea. Just five years ago, in 2020, the country recorded a net gain. That has since shifted to a steady and worsening outflow. The broader science sector tells a similar story. In 2021, Korea's rate of scientists moving abroad (2.85 percent) was higher than the rate of foreign scientists moving in (2.64 percent). This placed Korea 33rd out of 43 countries in terms of scientific talent retention. The US is the top attractive destination for Korean researchers. The US issued 5,684 high-skilled EB-1 and EB-2 visas to Korean nationals in 2023. That is roughly 11 per 100,000 people, a far higher rate than China (0.94), Japan (0.86) and even India (1.44). And 71.1 percent of Korean Ph.D. graduates in the US reported plans to stay there long-term, a rise from the previous five years, when it had stayed below 70 percent. The SGI report identifies several structural issues behind the exodus. Chief among them is Korea's rigid and hierarchical workplace culture, which many young professionals find stifling. Compensation is also a major issue. The median starting salary for assistant professors in Korea is about $32,000 a year. In the US, it's over 83,000. Countries like Japan ($46,000) and Germany ($70,000) also pay significantly more. In addition, the report posits that Korea's 52-hour workweek cap, though intended to protect workers, often limits the flexibility that high-performing researchers need. Other countries make exceptions. The US, for instance, exempts many high-earning professionals from strict working hours regulations. Japan and Germany also allow special provisions for researchers in advanced fields. With Korea's working-age population shrinking and the research workforce projected to decline by over 20 percent by 2040, the report warns that the country faces a future where it trains the world's talent but struggles to keep enough of it to sustain its own growth. SGI recommends sweeping policy changes, including performance-based pay, flexible work arrangements for high-skilled professionals, and structured incentives for overseas Koreans to return. 'We're watching the foundation of Korea's scientific future quietly erode,' said SGI researcher Kim Cheon-goo. 'And we are helping build it elsewhere.'
Korea Herald
15-06-2025
- Business
- Korea Herald
President Lee vows trade policy flexibility amid tariff uncertainties
President Lee Jae-myung's trade policy will likely come with flexibility to cope with US President Donald Trump's tariff salvo against US trading partners, including South Korea, Lee told business leaders Friday ahead of his departure for the G7 Summit in Canada. At a meeting with South Korean business leaders, Lee was quoted by his spokesperson Kang Yu-jung as saying that the advent of economic nationalism, trade protectionism and supply chain segmentation has "triggered a major shift in the global trade order." This, Lee said, has resulted in a trade war that "greatly undermined the competitive edge and exports of South Korean industry." During a closed session of the meeting, Lee stressed a need to "go all out to overcome the crisis through practical and flexible trade policies," Kang added. According to Kang, Lee also told business circles that he would advocate the stance of South Korean businesses to safeguard national interests on international stages as the nation's head of state, starting with the G7 Summit. Lee's itinerary for his time in Canada has yet to be disclosed. The president's remarks came after Chey Tae-won, SK Group chair and head of the Korea Chamber of Commerce and Industry business lobby group, said to Lee that South Korean entrepreneurs were troubled by the lingering volatile tariff landscape, which posed challenges in making the right decision for their businesses. Trump briefly imposed 25 percent tariffs on most South Korean imports to the United States in April as part of "reciprocal tariffs" against most trade partners that he said would improve the US trade balance. A few days later, Trump announced a 90-day pause on these tariffs, the deadline for which expires in early July. Also during the meeting, the liberal president, who was inaugurated last week, called for South Korea's business circles to mitigate public distrust toward them. "I believe South Korea is no longer in a state where sustainable growth is impossible due to unfair competition, privileges to certain entities, or exploitations (of labor)," the president said during his opening speech at the meeting. "But public distrust (toward South Korean businesses) remains. I think it would be great to tackle that public distrust." Lee also promised to focus on pouring his administration's capacity into reducing red tape for business circles, while saying regulations related to fair business practices and public safety should stand. It was the first meeting between Lee and representatives of business lobby groups since he assumed the presidency on June 4. The meeting was attended by Chey of KCCI; Sohn Kyung-shik, chair of the Korea Enterprises Federation; Ryu Jin, chair of the Federation of Korean Industries; Yoon Jin-sik, chair of the Korea International Trade Association; Kim Ki-moon, chair of the Korea Federation of Small and Medium Enterprises and Choi Jin-shik, chief of the Federation of Middle Market Enterprises of Korea. Also joining the event were heads of several major South Korean conglomerates, including Samsung Electronics Executive Chair Lee Jae-yong, Hyundai Motor Group Executive Chair Chung Euisun, LG Chair Koo Kwang-mo and Lotte Chair Shin Dong-bin.
