"Only 27% of Japanese Companies Consider Expanding Business in Korea... Need to Restore Worsening Korea-Japan Relations"

[Asia Economy Reporter Su-yeon Woo] Amid the recent deterioration of Korea-Japan relations, voices of self-reflection have emerged from the political and business circles of both countries, calling for the restoration of bilateral ties. As the boycott of Japanese products spreads, there are claims that the strained relations between the two countries, including the downsizing of Japanese companies operating in Korea, need to be repaired.

The Federation of Korean Industries (FKI) held a seminar titled "2021 Bilateral Cooperation Measures for a New Korea-Japan Relationship" on the morning of the 27th at the FKI headquarters. Kim Jin-pyo, chairman of the Korea-Japan Parliamentary League (Democratic Party of Korea lawmaker), emphasized, "The political circles in Korea and Japan have politically exploited anti-Japanese and anti-Korean sentiments to secure their support bases," adding, "We must ease the confrontational emotions of the peoples of both countries and allow policymakers more room to maneuver."

Toshihiro Nikai, secretary-general and the second-in-command of Japan's Liberal Democratic Party, who sent a congratulatory video for the seminar, said, "Although recent bilateral relations are difficult due to historical issues, exchanges should continue in areas where cooperation is necessary," proposing the restoration of human exchanges, cooperation in ESG fields, and strengthening exchanges between private economic organizations.

Tomoyuki Moriyama, director of the Seoul Japan Club (SJC), who participated in the panel discussion, conveyed the growing concerns among Japanese companies about their operations in Korea. According to a survey of Japanese companies operating in 20 countries across Asia and Oceania last year, Korea ranked first with a 72% profit ratio, but only 27% of companies considered expanding their business in Korea in the future.

Director Moriyama stated, "Korea has been a country where Japanese companies have successfully conducted business so far, but it is also a country where business management is becoming difficult," adding, "We want to maintain a win-win relationship, but the emotional reactions such as the boycott of Japanese products are very concerning."

On the Korean side, Kim Gyu-pan, senior researcher at the Korea Institute for International Economic Policy, who participated in the discussion, argued that lessons for improving Korea-Japan relations should be sought from U.S.-Japan and Japan-China relations. Researcher Kim said, "Just as Japan and China have developed a mutually complementary economic relationship despite political and security conflicts, Korea-Japan relations also have ample potential for cooperation in areas supported by Korea's technological capabilities, such as semiconductors, batteries, hydrogen development, and carbon reduction technologies."

Joo Won, head of economic research at Hyundai Research Institute, who gave a presentation on revitalizing Korea-Japan economic cooperation, proposed five cooperation measures: ▲ mutual introduction of vaccine passports ▲ promotion of Korea-Japan currency swap ▲ establishment of an East Asian economic bloc ▲ cooperation in restructuring the GVC (global value chain) ▲ joint response to carbon neutrality. Huh Chang-soo, chairman of the FKI and host of the event, said, "The damage caused by the deterioration of Korea-Japan relations returns to companies and citizens of both countries," adding, "The FKI will also strive to cooperate in various fields such as ESG cooperation with Japan's Keidanren and technology exchange in the Fourth Industrial Revolution."

This content was produced with the assistance of AI translation services.