‘Hard to be on Team Korea’
The author is a columnist of the JoongAng Ilbo.
Big companies are at the vanguard of Korea’s economic battle with Japan. They are bombarded with commands and messages from the government and the ruling party. President Moon Jae-in on Monday touted Korea’s triumph over Japan’s long-held supremacy in electronics, semiconductors and home appliances. “We can win this [ongoing war on the materials sector, too],” he said. By “we”, he would be referring to corporate household names like Samsung and Hyundai. Chaebols, the conglomerates that had been scorned by liberal forces as “past ills that must be corrected and reformed,” are suddenly comrades in a diplomatic — economic — row with Japan. It is a relief that the government finally appreciates the value of chaebols in Korea, but whether corporate leaders are happy about the sudden coziness is another matter.
“Korean companies are being smothered from all corners. At times like this, it is best to keep eyes, ears and mouth shut and wait until the storm passes,” an executive of a big company said.
Samsung Electronics, SK Hynix and other technology giants were summoned by the Chinese National Development and Reform Commission to be warned of “grave consequences” if they go along with the Trump administration’s ban on Huawei Technology and other Chinese companies. The news broke after Microsoft and Dell reported the meeting to the U.S. government. An executive at one of the Korean companies shrugged off the Chinese ultimatum. “We are used to being nagged by the Chinese government. We don’t inform the Korean embassy in Beijing about such meetings. We have long given up on support from our government since the Thaad [terminal high altitude area defense] fiasco,” he said. The key to survive in China is to keep your mouth shut, he added.
If China is a bully, the United States is a gangster. During his brief one-day stop in Seoul last month, U.S. President Donald Trump called leaders of 20 largest Korean companies to his hotel. He singled out Lotte Group Chairman Shin Dong-bin — invited to the White House after the conglomerate built a $3.1 billion plant in the United States — and called him his “best friend” several times. The entrepreneurs were told to arrive at the hotel by 8:30 a.m. although the meeting was scheduled for 10:00 a.m. Trump was 30 minutes late so the business leaders sat around for two hours for a brief hand-shake with the American president. One executive complained that Korean companies would not be treated in such a way if their government did better on the diplomatic front.
Dupery and ambush are Japan’s way. But Tokyo is meticulous in scheming. The Japanese go for the core to attack. It is how it won in battle against China and Russia and how it dealt a serious blow to the United States at Pearl Harbor. A surprise attack has been its winning strategy. Anyone who studied Japan for a long time should have known what targets Japan would aim for on the economic front.
The blame once again fell on big businesses. Democratic Party Rep. Woo Won-shik accused Samsung Electronics and SK Hynix for over-reliance on Japanese materials to make them the dominant players in the materials industry. Park Young-sun, minister of SMEs and start-ups, was blunter and accused large companies of neglecting local small and mid-sized producers by turning to imports from Japan.
They may appreciate the president’s encouragement, but what Korean companies demand from the government is real action to help them. They could have some relief at home if the government undoes the anti-business measures — such as pressures to convert contract workers to full-time workers, steep increases in the minimum wage, universal enforcement of the 52-hour workweek, regular raids by prosecutors, corporate tax hikes, ever-expanding regulations and union-friendly policies. If the government cannot afford to do it, it can stop blaming companies for everything. “No companies dare to ask the government to solve the problem even though the issue with Japan is an inter-government clash, not a business affair,” one executive said. “In the meantime, Korean companies would have lie low. It is hard to be on Team Korea.”