It was found that 5 out of 10 export small and midsize corporations (50.3%) are willing to expand exchanges with Japan.
The Korea Federation of Small and Medium Enterprises announced on the 23rd the results of the "Korea-Japan economic cooperation SMEs perception survey," conducted on 400 export SMEs to mark the 60th anniversary of the normalization of diplomatic relations between Korea and Japan. The survey was conducted from the 15th to the 31st of last month.
Looking at overall economic relations between Korea and Japan over the past 60 years, the perception that "Korea and Japan are in an equal relationship" is currently high at 65.5%.
With the recent Korea-Japan summit and the resumption of shuttle diplomacy as a turning point in improving relations, more than half of respondent corporations, 50.3%, said they are willing to expand exchanges with Japan, while 49.7% said they are not. In particular, 75.5% of export SMEs to Japan said they are willing to expand exchanges with Japan.
Among the 8 out of 10 corporations (82.6%) that hope to expand exchanges, the most cited area (multiple responses) for revitalizing exchanges was expanding exports, followed by ▲ expanding imports of raw and subsidiary materials (19.9%) ▲ expanding investment (10.0%) ▲ expanding human and technology exchanges (7.5%), in that order, it was found.
Meanwhile, corporations that answered "no willingness to expand exchanges with Japan" cited as reasons (multiple responses) ▲ completion of substitution for raw and subsidiary materials (37.2%) ▲ low market attractiveness (28.6%) ▲ concerns about uncertainty in bilateral relations (20.1%), among others.
Regarding the impact of improved Korea-Japan relations on the Korean economy and corporate growth, 6 out of 10 export SMEs (58.8%) said it "helps." Only 5.5% responded that it "does not help."
Export SMEs to Japan (69.5%) had a higher rate of responding that improved Korea-Japan relations help the Korean economy and corporate growth compared with general import-export corporations (48.0%).
As for the government's role needed to expand Korea-Japan economic exchanges (multiple responses), ▲ support for market access such as exhibitions (54.5%) ranked highest, followed by ▲ expanding industry-specific technology and human exchanges (38.0%) ▲ expanding financial support (31.8%), in that order, it was found. In particular, in the bio and pharmaceutical industries, "support for market access such as exhibitions" was high at 83.3%.
As priority tasks that the two countries should jointly address (multiple responses), ▲ joint response to global trade issues such as protectionism (75.5%) ▲ expansion of concluding bilateral and multilateral trade agreements (58.5%) ▲ joint response to low birthrates and aging (24.3%), were cited in that order, it was found.
Amid the recent trend of improved bilateral relations, discussions are underway to relaunch Korea-Japan FTA talks. Regarding the need for a Korea-Japan FTA, 35.3% of respondent corporations said it is "necessary," while only 11.0% said it is "not necessary."
Chu Mungap, head of economic policy at KBIZ, said, "To effectively respond to changes in the economic and industrial environment that both countries face in common, such as the reorganization of global supply chains and demographic shifts, it is necessary to strengthen practical cooperation between Korean and Japanese SMEs, which have complementary relationships in parts, technology, and personnel."
Chu, the Deputy Minister, added, "The Korea Federation of Small and Medium Enterprises will hold the 'Korea-Japan SME economic forum commemorating the 60th anniversary of the normalization of diplomatic relations' in Tokyo on the 25th," and said, "We expect this forum to be a starting point for substantially expanding exchanges and cooperation between SMEs of the two countries."