손경식 Chairman of the Korea Employers Federation: "Second Quarter Economic Downturn Intensifies... Liquidity Support Must Be Provided 'As Needed'"

Announced at the Korea Employers Federation Executive Meeting on the 13th... First Meeting Held Since Official Upgrade of the Assembly

Son Kyung-sik, Chairman of the Korea Employers Federation, is giving a greeting at the Korea Employers Federation Chairman's meeting held on the 13th at the Westin Chosun Hotel in Jung-gu, Seoul. Photo by Moon Ho-nam munonam@

[Asia Economy Reporter Kim Ji-hee] "If the current hemorrhagic management situation continues due to the novel coronavirus infection (COVID-19) crisis, many companies will face serious crises. Since management stabilization funds and liquidity support will continue to be necessary, they must be provided in sufficient scale."

Son Kyung-sik, Chairman of the Korea Employers Federation (KEF), stated this on the 13th at the 'KEF Chairman Group Meeting' held at the Westin Chosun Hotel in Seoul, saying, "It will be difficult for the global economy to recover to the pre-COVID-19 state even after next year." At the meeting, major chairpersons attended and discussed 10 tasks related to responding to the COVID-19 crisis, including corporate tax cuts and improvements to the working hours system.

At the meeting, Chairman Son expressed concern, saying, "Korea, which ranks among the top globally in export-import dependence and heavily relies on global supply chains, inevitably faces greater real economy shocks," adding, "Already in April, exports decreased by 24.3% compared to the same month last year, and in the second quarter, the deterioration of real economy indicators such as consumption, production, investment, and employment will intensify, including a sharp decline in corporate sales and a large-scale shift to operating losses."

He emphasized, "National policy capabilities must be fully mobilized so that our companies can endure the management crisis, survive, and maintain employment as much as possible."

Regarding the post-COVID-19 global economic order, he pointed out, "De-globalization will advance with the intensification of protectionism and strengthening of regional value chains (RVC)," and stressed, "We must further enhance the international competitiveness of our economy and companies and upgrade both the quality and quantity of employment." To this end, he explained that fundamentally, economic systems and institutions must be established to revitalize companies and transform Korea into an 'investment-attractive country' for domestic production.

Kwon Kyung-sik, Chairman of the Korea Employers Federation, is taking a commemorative photo with attendees at the Federation's Chairman Meeting held on the 13th at the Westin Chosun Hotel in Jung-gu, Seoul. Photo by Moon Ho-nam munonam@

Accordingly, Chairman Son conveyed the importance of corporate tax cuts and regulatory reforms. He said, "Lowering corporate tax, a symbolic indicator of the business environment, to an appropriate level considering global standards will have significant policy meaning by expanding companies' capacity for future industrial investment and creating quality jobs. Regulatory reforms should also be proactively and intensively pursued," and additionally suggested, "We must establish equitable and cooperative labor-management relations and develop labor systems that enhance productivity."

KEF decided to continuously consult with relevant government departments on the 10 proposals discussed that day, including ▲corporate tax cuts ▲improvements to the investment tax credit system and the carryforward loss system ▲working hours system improvements ▲relaxation of regulations under the Chemical Substances Control Act and the Chemical Accident Prevention Act ▲reduction of the burden rate for the Electric Power Industry Infrastructure Fund. Specifically, these include raising the investment tax credit rate for energy-saving facilities, extending or abolishing the deduction period for carryforward losses, improving flexible and selective working hours systems, expanding the scope of special extended work permits, and simplifying procedures.

Meanwhile, this chairman group meeting was the first held since it was elevated to an 'official meeting body' to discuss KEF's major policy activities at the regular general meeting in February. Attendees included Chairman Son, Kwon Oh-gap, Chairman of Hyundai Heavy Industries Holdings, Kim Chang-beom, Vice Chairman of Hanwha Solutions, Dong Hyun-soo, Vice Chairman of Doosan, Park Jin-seo, President of Sempio Foods, Baek Woo-seok, Chairman of OCI, Shim Gap-bo, Advisor of Samick THK, Ahn Byung-duk, Vice Chairman of Kolon, Yoon Dong-han, Chairman of Korea Kolmar, Yoon Yeo-chul, Vice Chairman of Hyundai Motor Company, Lee In-yong, President of Samsung Electronics, Lee Jang-han, Chairman of Chong Kun Dang, Cho Kyu-ok, Chairman of Jeonbang, Choi Byung-oh, Chairman of Fashion Group Hyungji, Hwang Gak-gyu, Vice Chairman of Lotte Holdings, and Kim Yong-geun, KEF Senior Vice Chairman.