2024-03-18 12:26:00
Fair Trade Commission Chairman Han Ki-jeong (left) and American Chamber of Commerce in Korea (AmCham) Chairman James Kim are having a conversation while attending a special meeting with Chairman Han held at the Grand Hyatt Hotel in Yongsan-gu, Seoul on the 7th./News 1
AMCHAM (American Chamber of Commerce in Korea), which has about 800 American companies active in Korea, said, “This is a golden opportunity to attract so-called ‘ex-Chinese’ companies that are leaving China in the aftermath of the conflict between the US and China.” A report was delivered to President Yoon Seok-yeol saying, ‘To this end, excessive regulations such as the Serious Accident Punishment Act and the 52-hour workweek system must be reformed.’ Although AMCHAM has delivered a letter to Korea urging system improvement, this is the first time it has delivered a document in the form of a report containing various data and analysis to the President.
AmCham announced on the 18th that it had delivered a 32-page ‘Report on Korea’s Strategy for Attracting Global Enterprises in the Asia-Pacific Region’ containing these contents to the President’s Office early this month. In this report, AMCHAM directors (30 people) personally signed to indicate their agreement with the contents of the report. AMCHAM said, “In the past, we mainly made policy suggestions (letters) to relevant government ministries, but this time, for the first time, we also delivered a report containing content to support the suggestions to the President’s Office.” In April 2022, AMCHAM delivered policy recommendations related to ‘regulatory innovation to expand foreign investment’ to then-President-elect Yoon Seok-yeol.
The AmCham report noted that the phenomenon of global companies moving away from China, triggered by the coronavirus pandemic lockdown and conflict between the U.S. and China, could be an opportunity for Korea. The report said, “(China’s) geopolitical concerns and economic uncertainty have led to a decline in the preference for Hong Kong and China as locations for the Asia-Pacific headquarters,” adding, “Korea has solid infrastructure, strategic and geographical proximity to a sizable consumer market, and a strong “It has emerged as the optimal destination for multinational companies (Asia-Pacific headquarters) as it has an established supply chain infrastructure,” he said. In a recent AmCham survey of member companies on ‘the country they would like to locate their Asia-Pacific headquarters in’, Korea ranked second after Singapore.
However, AmCham diagnosed that despite Korea’s geographical advantages and excellent infrastructure, it is having difficulty attracting foreign companies due to ‘regulations’. First of all, the report cited the risk of criminal liability for the CEO. Regarding the Serious Accident Punishment Act, AmCham said, “It imposes much heavier prison sentences or fines than countries such as Japan, Hong Kong, and Singapore,” and “It increases the risk of CEOs.” Also, in the field of ‘digital economy’, “The Korean cloud market is completely separated from the global environment due to regulations such as network separation, cloud security certification programs, and security evaluation systems, making it difficult to introduce innovative technologies, including artificial intelligence (AI), into the country. “We are going through this,” he said. According to the report, in the evaluation of labor policies and flexibility by country comparing hiring/firing flexibility and working hour regulations, Korea ranked 97th out of 141 countries, followed by competitors Singapore (1st), Japan (11th), and Hong Kong (19th). It lagged significantly behind.
An AmCham official said, “This report implies that there is a high possibility that global companies will move their Asia-Pacific headquarters to Korea even if regulations that do not meet global standards, such as excessive irregular tax audits and an inflexible 52-hour workweek, are lifted.”
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