Choo promises reforms to transform Korea into business hub

Economy

Published: 08 Mar. 2023, 17:48

Choo promises reforms to transform Korea into business hub

Finance Minister Choo Kyung-ho, left, and James Kim, CEO and chairman of the American Chamber of Commerce in Korea (Amcham), pose for a photo at a conference held in southern Seoul on Wednesday to discuss economic policy. [AMCHAM]

Finance Minister Choo Kyung-ho vowed to create a favorable business environment for Korea to become the Asian business hub.

“The government’s stance to boldly abolish regulations that do not meet the global standards is solid,” Choo said at a conference hosted by the American Chamber of Commerce in Korea (Amcham) at COEX in southern Seoul on Wednesday. The government “will put in effort for American companies in Korea to be able to stably practice business activities.”

United States invested a total of $8.7 billion in Korea last year, remaining as Korea’s top investment source.

Choo added the authorities will seek harmonious solutions on pending issues, like the Inflation Reduction Act, in a way that ensure a mutually beneficial and future-oriented development of the bilateral ties.

The event was held to celebrate the 70th anniversary of Korea-U.S. alliance and Amcham. It was attended by James Kim, CEO and chairman of Amcham, and corporate representatives.

Choo said the financial authorities will prioritize stabilizing inflation for some time. He noted the need for reforms in a number of areas, while noting concerns of foreign businesses in Korea about the labor-management relations.

“There are a number of regulations in Korea that cannot be easily understood. Customs in labor-management are inconvenient and CEOs are exposed to the risk of becoming a criminal by a sort of accident,” Choo said, adding Korea will establish a practice for labor union activities and strictly execute laws based on principles.

Korea is known for its powerful labor unions. Some labor unions of major corporations use their strong bargaining power to protect the vested interests of the members.

Choo reiterated the desire to be included in the FTSE World Government Bond Index (WGBI) and noted a series of systematic changes, including the extension of foreign exchange market trading hours.

FTSE Russell put Korea on the watch list for a potential inclusion in the FTSE WGBI, which is the world’s largest bond index and includes the debt of 23 large economies. A estimated $2.5 trillion in funds track the index.

Korea’s joining of the of the index is projected to attract up to 60 trillion won ($45 billion) in foreign investment into the local bond market.

“This year, Amcham will continue to promote greater economic growth in Korea and be a win-win partner to the Korean government to accomplish one of our key initiatives of establishing Korea as regional headquarters in APAC,” said Kim.

On the same day Choo met his Saudi counterpart, Mohammed Al-jadaan, in Seoul. Choo asked for a closer attention to Korean companies to be able to participate in the Neom project.

BY JIN MIN-JI [jin.minji@joongang.co.kr]