McKinsey & Company Partner Park Joong-ho, left, moderates a panel discussion during the 2022 Korea Times Forum at the Korea Chamber of Commerce and Industry (KCCI) building in Seoul, Tuesday. From left are Park, KCCI Executive Vice Chairman Woo Tae-hee, American Chamber of Commerce in Korea Chairman James Kim, Korean Academic Society of Business Administration President Han Sang-man and European Chamber of Commerce in Korea Chairperson Dirk Lukat. Korea Times photo by Shim Hyun-chul

Business experts view Korea-unique standards as obstacles to hub plan

By Park Jae-hyuk

President Yoon Suk-yeol should accelerate efforts to abolish regulations conflicting with international standards, in order to prevent Korea from repeating failures in its decades-long drive to become a global business hub, according to business leaders from the U.S. and Europe as well as renowned Korean experts participating in the 2022 Korea Times Forum, Tuesday.

The panelists expressed optimism overall about the possibility of Asia's fourth-largest economy becoming an attractive destination for multinational companies, thanks to the new government's deregulatory stance.

But at the same time, they pointed out that the country still has many things to do to realize its potential as a business hub.

"Our board of governors wrote a letter to President-elect Yoon when he became the president, and gave him our strong confirmation that we want to help make Korea a regional hub," American Chamber of Commerce in Korea (AMCHAM) Chairman James Kim said. "But we did ask him to do a few things ― one is taxation both at corporate and individual level, Korea-unique standards and some CEO risk that happens."

American Chamber of Commerce in Korea Chairman James Kim speaks in a panel discussion during the 2022 Korea Times Forum at the Korea Chamber of Commerce and Industry (KCCI) building in Seoul, Tuesday. Korea Times photo by Shim Hyun-chul

European Chamber of Commerce in Korea (ECCK) Chairperson Dirk Lukat mentioned international standards, labor reform and transparency in regulations as the three key areas pointed out by European businesses active in Korea.

"With international standards accepted and applied in Korea, administrative processes will be simplified allowing new products to reach markets timely, reducing the cost and making it more attractive for foreign companies to invest in Korea," he said. "Lately, during the COVID-19 pandemic, we saw some areas where foreigners were discriminated particularly, if you look at the acceptance of overseas inoculations."

European Chamber of Commerce in Korea Chairperson Dirk Lukat speaks in a panel discussion during the 2022 Korea Times Forum at the Korea Chamber of Commerce and Industry (KCCI) building in Seoul, Tuesday. Korea Times photo by Shim Hyun-chul

Korea Chamber of Commerce and Industry (KCCI) Executive Vice Chairman Woo Tae-hee agreed that strict regulations, high corporate taxes and labor market rigidity have acted as obstacles to foreign companies doing business here, making it especially difficult for Korea to achieve its goal of becoming a global financial hub.

From that standpoint, he was skeptical about newly elected Incheon Mayor Yoo Jeong-bok's strategy to make the city a financial hub of East Asia by attracting companies, banks and financial institutions that are leaving Hong Kong due to security issues.

"To attract money from Hong Kong or elsewhere, you need to have a free flow of information and capital. To do this, he needs to establish a transparent and free financial market that is not regulated by the government," Woo said. "I don't have confidence that Incheon has a better chance than Hong Kong."

Korea Chamber of Commerce and Industry (KCCI) Executive Vice Chairman Woo Tae-hee speaks in a panel discussion during the 2022 Korea Times Forum at the KCCI building in Seoul, Tuesday. Korea Times photo by Shim Hyun-chul

Korean Academic Society of Business Administration President Han Sang-man, who is also a professor of Sungkyunkwan University Business School, called for increased labor market flexibility in order for Korea to become a global business hub.