Chey Tae-won, chairman of the Korea Chamber of Commerce and Industry and chairman of SK Group, said the growth engine of the Korean economy is weakening and stressed that the policy paradigm should shift from regulation to growth.
Chey appeared on the current affairs talk program "KBS Sunday Diagnosis" on the 18th and said, "Korea's growth rate has steadily fallen by 1.2 percentage points every five years," adding, "The potential growth rate has now declined to about 1.9%, and the real growth rate is hovering around a lower 1%."
He explained, "An economy where growth has stopped is like a bicycle with the brakes on; it takes much more force to start again." He then warned, "The Korean economy's spark for growth has already weakened, and if we do not pivot now, 'resource flight,' such as capital and talent outflows, could make recovery even more difficult."
Chey pointed to an institutional environment that becomes more disadvantageous as growth occurs as a reason corporations find it hard to focus on growth. He said, "When a corporation grows, benefits should increase, but in reality, as the asset size grows, regulations and obligations surge," noting that "so-called 'stepwise regulations' are dampening the will to grow."
He added, "As the regulations and risks that must be borne due to growth outstrip the fruits gained from growth, many corporations choose to maintain the status quo," and "In this structure, corporate growth cannot translate into national growth."
Chey characterized the current economic situation as "deteriorated health" and emphasized that the policy stance should be aligned with boosting growth drivers.
He said, "Just as we must change our diet or exercise when our health worsens, in a situation where economic growth is almost flickering out, policies should be changed so that many large companies can emerge." As an example, he cited Taiwan, which recently surpassed Korea in per capita GDP (gross domestic product).
Chey said, "Taiwan focused on its target industry, IT, instead of size-based regulations, and ultimately created a sovereign wealth fund to build today's TSMC through strategic investment," adding, "Growth will come when many large companies come in, flow in, and compete."
He also expressed the view that cooperation with Japan should be strengthened. Chey said, "If Korea and Japan adopt a single visa regime like the European Union's (EU) Schengen Agreement, it would create about 3 trillion won in added value," adding, "If we approach the two countries as one 'economic community,' more diverse products and synergies, such as 'third-country Korea-Japan simultaneous-visit travel packages,' will emerge."
He also stressed that AI is the next-generation growth engine. He said, "AI is not a simple technological advance but a civilizational shift on the order of moving from stone to iron," calling it "a core element of the national strategy." He then proposed, to strengthen Korea's AI competitiveness, ▲ building AI infrastructure at a global level ▲ creating a market for AI startups ▲ establishing a support system for proof of concept (POC).
Chey emphasized, "Korea has ample potential to create new growth and a new future," adding, "Now is the time to combine the diverse cultural assets represented by K-culture with AI technology and soft capabilities to craft a new national model and economic narrative."