Second Miracle on the Han is in the U.S.

Kim Dong-ho
The author is an editorial writer of the JoongAng Ilbo.

“Compliments can make even a whale dance,” says a Korean proverb. The magic can work not just on people, but on corporations. The Yoon Suk-yeol government has made them dance in big steps.

Chaebol like Samsung, SK, LG, Hyundai Motor, Lotte, Posco, Hanwha, GS, Hyundai Heavy Industries, Shinsegae, CJ, and Kolon pledged to invest a combined 1,080 trillion won ($870 billion) over the next five years. They rushed out investment schemes after staying low over the past five years.

Companies could not help sighing, not just from intense competition in the global market, but also from anti-business and anti-market tone and policies of the Moon Jae-in administration, which vowed to reform chaebol. A law punishing employers for serious industrial accidents passed the National Assembly towards the end of Moon’s term. Companies laid low so as not to draw government attention. The Federation of Korean Industries (FKI) — once the most powerful business lobby group — was even excluded from government events. Most key members of the group left the FKI. Entrepreneurship, investment and jobs were wanting.

Jobs are made when there are investment opportunities. Companies would hoard cash if they become reluctant to invest and hire. As business sentiment has dramatically changed, companies have become ambitious again. The elevation of Korea-U.S. ties to a comprehensive alliance encompassing the economy, security and technology cooperation has been the impetus. At the Korea-U.S. summit in May, the power of Korea Inc. has been recognized and appreciated.

Threatening chaebol with reform by political power is outdated reasoning. There must not be left or right in stimulating corporate activities. U.S. President Joe Biden visited Samsung Electronics as soon as he arrived in Korea and devoted nearly an hour to the head of Hyundai Motor Group before he left to underscore the influence and value of Korea’s top businesses on the global stage. Those companies should not be regarded as subjects to be tamed.

Samsung Electronics chip plants, Hyundai Motor car plants, and LG and SK battery plants spreading across the United States should be the second Miracle on the Han River. Until the 1990s, Korean brands were regarded as cheap assemblies or copycats. Second-rates had no place on the global stage.

President Yoon Suk-yeol shakes hands with Samsung Electronic Vice Chairman Lee Jae-yong at an event to foster symbiotic growth for large and small companies in the garden of the presidential office in Yongsan, May 25. [JOINT PRESS CORPS]

Local companies evolve to international ones and then to multinationals. Korean businesses have become top-rate multinationals, chased by the technology-strong U.S. for investment. America is courting Korean companies purely for U.S. interests. The U.S. has shifted to innovative and high value industries since the 1990s and neglected manufacturing, including chips and nuclear reactors. Korea was able to leverage on the U.S. vacuum and build supremacy.

The new government pledging incentives and business-friendly environment has added traction. Despite global competitiveness, Korean companies were not appreciated at home. No.1 Samsung raised the bar in corporate investment by pledging 450 trillion, of which 360 trillion won will be spent at home.

Companies took their investment and hiring overseas. Creating jobs in America is not entirely bad. Once Korean technology can become global standard, it can increase its market share. If Korea does not act, Japan, Taiwan or other companies or U.S. enterprises will take its place.

But jobs must be made at home, too. The domestic stage must make local companies dance. Big chaebol have pledged to create more than 400,0000 jobs. They would willingly build factories and create jobs at home if regulations are lifted and labor conflict eases.