About half of Korea's export-oriented small and midsize corporations said they intend to expand exchanges with Japan going forward.
The Korea Federation of Small and Medium Enterprises on the 23rd released the results of the "Korea-Japan economic cooperation SME perception survey," conducted on 400 export-oriented small and midsize corporations from the 15th to the 31st of last month to mark the 60th anniversary of the normalization of diplomatic relations between Korea and Japan.
According to the survey, 6 out of 10 domestic exporting corporations assessed the current economic relationship between Korea and Japan as "on equal footing." Also, about half said they intend to expand exchanges with Japan. In particular, among corporations with experience exporting to Japan, as many as 75.5% said they hope to expand exchanges.
As for areas where expanded exchanges are expected, export expansion (82.6%) was the most cited. It was followed by increased imports of raw and subsidiary materials (19.9%), increased investment (10.0%), and expanded human and technology exchanges (7.5%). By contrast, corporations with no intention to expand exchanges cited completion of substituting raw and subsidiary materials (37.2%), a decline in the attractiveness of the Japanese market (28.6%), and uncertainty in bilateral relations (20.1%) as reasons.
On the question of how improved Korea-Japan relations would affect Korea's economy and corporate growth, 6 out of 10 export-oriented small and midsize corporations (58.8%) said it would help. Small and midsize corporations exporting to Japan (69.5%) were more likely to respond positively than general import-export corporations (48.0%).
As for the government's role desired by small and midsize corporations, support for developing sales channels such as through exhibitions ranked highest at 54.5%. Expansion of industry-specific technology and personnel exchanges (38.0%) and increased financial support (31.8%) also garnered high responses. In particular, in the bio and pharmaceutical sectors, demand for support in developing sales channels was the highest at 83.3%.
As tasks the two countries should tackle together, respondents cited joint responses to global trade issues such as protectionism (75.5%). It was followed by expanding the conclusion of trade agreements (58.5%) and responding to low birthrates and aging populations (24.3%). Regarding the need for a Korea-Japan FTA, which has recently been under discussion, 35.3% of responding corporations said it is "necessary." Responses saying it is "not necessary" also came in at 11%.
Chu Moon-gap, head of the Economic Policy Division at KBIZ, said, "To effectively respond to changes in the economic and industrial environment that both countries commonly face—such as the restructuring of global supply chains and demographic shifts—there needs to be strengthened, practical cooperation between Korean and Japanese small and midsize corporations, which are in complementary relationships in parts, technology, and human resources."
He 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, Japan, on the 25th," and noted, "We expect this forum to serve as a starting point for substantially expanding exchanges and cooperation between the two countries' small and midsize corporations."