Choi Tae-won: "Korea and Japan Should Form an Economic Bloc Like the EU... China Is a Competitor"

Korea-Japan Face Low Economic Growth Rate
Economic Bloc Needed to Maintain Current Status in 10 Years
"Sorry for Failing to Host Busan Expo"

Choi Tae-won, chairman of SK Group, identified China as a strong competitor in the supply chain sector and stated on the 4th (local time) that South Korea and Japan should form an economic bloc similar to the European Union (EU).

[Image source=Yonhap News]

In his keynote speech at the '2023 Trans-Pacific Dialogue (TPD)' hosted by the Choi Jong-hyun Academic Foundation at the Salamander Resort near Washington D.C. on the same day, Chairman Choi said, "South Korea and Japan have benefited greatly from the past World Trade Organization (WTO) system, but they can no longer enjoy such benefits. We must adapt to change."

He evaluated, "Many environments, including supply chains and economic security, are changing. China was once a large market, but now it is a strong competitor across the entire supply chain, including energy, semiconductors, and electric vehicle batteries." He added, "South Korea and Japan are not substantial economic competitors and can form a mutually beneficial relationship," emphasizing, "We can benefit each other in semiconductors, batteries, and supply chain sectors."

Chairman Choi pointed out that both South Korea and Japan are facing low economic growth rates. He said, "This means that in 10 years or more, we may not be able to maintain our current status," and added, "We need to solve this problem, and for that, I propose an economic bloc like the EU."

So far, Chairman Choi has advocated that South Korea and Japan should lead the establishment of a fourth economic bloc following the United States, China, and the EU.

He noted, "For the past 30 to 40 years, we have enjoyed much through export-oriented manufacturing, but this export model has lost its effectiveness," and pointed out, "We need to find another way. There are not many options for South Korea and Japan." He also explained that an East Asian economic bloc model could help resolve the North Korean issue.

He emphasized that an economic bloc led by South Korea and Japan, organically connected to the U.S. economy, could achieve even greater 'win-win' results. Chairman Choi stated, "If the U.S. partners and the U.S. economy unite as one, we can approach a much larger single economic bloc."

In a subsequent meeting with reporters regarding the possibility of South Korea-Japan economic cooperation, Chairman Choi elaborated, "The almost unanimous voice in the Japanese business community is that it would be good to pursue this plan." He said, "From shipping and shipbuilding to steel, all are fields where cooperation is possible (in manufacturing)," and added, "If manufacturing-related data is shared, manufacturing can be upgraded and competitiveness enhanced through related artificial intelligence (AI)." Regarding cooperation in the semiconductor sector, he emphasized, "There are many synergies between the equipment and materials Japan possesses and the semiconductors produced by South Korea."

He cited energy as the largest area of cooperation. Chairman Choi said, "Both sides are the largest energy importers and will inevitably continue to be so," and predicted, "If the two countries integrate from joint purchasing to usage, the synergy could be worth hundreds of trillions of won." He also mentioned the possibility of cooperation in venture incubation and tourism, such as allowing tourists from third countries to visit the other country by obtaining a visa from either South Korea or Japan.

Regarding the failure to secure the Busan Expo, Chairman Choi apologized, saying, "I am sorry for the disappointment." He added, "I did not expect such a result at all, but I thought the steps were quite tangled," and said, "I believe a more advanced form of public-private cooperation system will be established in the future."