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China swims in global currents while Korea drowns in regulations

Published: 13 Oct. 2025, 00:03

Kim Dong-ho

The author is an editorial writer at the JoongAng Ilbo.

Eight years have passed since the Moon Jae-in administration introduced its income-led growth policy, built on two pillars: raising the minimum wage to 10,000 won per hour and capping working hours at 52 per week. The intent was to guarantee a livable income and allow workers to enjoy “life after work.” Public support was overwhelming at first, with the government’s approval rating surpassing 80 percent.

Yet the economic aftermath of the uniform 52-hour workweek has been profound. Strict limits on working hours fundamentally changed Korea’s work culture. Leaving work on time has become standard. Combined with higher labor costs from minimum wage hikes, restaurants now close earlier, and few businesses keep lights on past 10 p.m. Employers who violate the rule face up to two years in prison.

Office workers work late into the evening in Seoul on February 28, 2018, the day the National Assembly passed a revision to the Labor Standards Act reducing the maximum legal workweek from 68 hours to 52. [YONHAP]

The broader question is what such restrictions mean for Korea’s competitiveness. In the six to seven years since the regulation took hold, Chinese companies have stormed the Korean market — from robot vacuum cleaners to electric buses — while also advancing in semiconductors, with Alibaba developing next-generation AI chips. Korea’s once-unshakable lead in chipmaking is eroding. The 52-hour limit alone is not to blame, but a web of antibusiness regulations, shrinking entrepreneurial drive and the relocation of manufacturing overseas together have drained economic vitality.

This year's minimum wage is displayed on a poster in front of an employment support center in Mapo District, western Seoul on July 3. [YONHAP]

When Korean offices go dark at night while Chinese factories hum late into the evening, the outcome is predictable. In China, the official weekly limit is 44 hours, with an additional 36 hours of overtime allowed each month. In practice, the “996” culture — working 9 a.m. to 9 p.m., six days a week — remains common. Some even call it “007,” meaning round-the-clock dedication from both researchers and executives.

Time limits make sense for manual laborers, whose health must be protected from overwork. But for researchers and professionals, creativity thrives on continuity. Interrupting the flow of ideas can cripple innovation. That is why the United States exempts professionals in research and development from working-hour caps under its “white-collar exemption” system. Japan and other advanced economies have adopted similar models. Restricting work hours in high-value research fields, they argue, directly weakens national competitiveness.

Korean corporations face as many as 343 separate regulations once they grow large enough to be classified as major firms. The sheer volume of restrictions has made Korea, ironically, less business-friendly than some socialist economies. During visits to China and Vietnam this year, the contrast was striking. Despite being nominally socialist, their economies operate on unbridled capitalist logic. Companies compete fiercely, and governments function as active enablers of growth — resembling Korea in the 1960s and '70s, when industrial expansion was a national project.

In today’s global economy, ideology matters less than competitiveness. Since China abandoned rigid socialism in 1978 and embraced market reforms, it has poured national energy into technological innovation, now openly seeking to surpass the United States. Domestic firms survive only by producing top-tier technologies, fueling intense internal competition. Korea, in contrast, has become entangled in new layers of restriction — from the “Yellow Envelope Bill” and the Serious Accidents Punishment Act to amendments to the Commercial Act — that tighten control over business activity. While China thrives on competition, Korea is bound by regulation. The question is which system will prevail.

Members of the Incheon Airport branch of the Korean Public Service and Transport Workers’ Union chant slogans during the second day of their general strike at Incheon International Airport’s Terminal 1 on Oct. 2. [YONHAP]

President Lee Jae Myung recently acknowledged the need for balance, saying, “We must not commit the mistake of killing the ox to straighten its horn,” a Korean proverb warning against overcorrection. But labor unrest is already spreading. A new wave of autumn strikes, or chutu, has emerged. The Yellow Envelope Bill, designed to protect workers’ rights, is well-intentioned in theory. Yet it works only when both labor and management act responsibly. In practice, militant unions often push excessive wage demands or call strikes without regard to productivity or a company’s capacity to pay. When subcontractor unions target parent companies for major wage hikes despite indirect employment ties, the law can produce disastrous results.

As Korean firms face U.S. tariff shocks and expanding competition from Chinese manufacturers, growing labor disputes could further discourage investment and hiring. To avoid that spiral, Korea must free its companies from the regulatory trap that has bound them for years. Only by restoring a business environment that rewards initiative can the country avoid Japan’s decades-long stagnation and revive its fading economic momentum.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.