Ruling and Opposition Presidential Candidates United in Voice for Manufacturing Regulation Improvement (Comprehensive)

Industrial Union Forum Debate - Lee Jae-myung "Must Invest in Content and AI" Yoon Seok-youl "Improve Manufacturing Industry Structure"

[Image source=Yonhap News]

[Asia Economy Reporter Kiho Sung] The leading presidential candidates from both major parties, Lee Jae-myung of the Democratic Party of Korea and Yoon Seok-youl of the People Power Party, have pledged to rationalize and improve regulations while promoting the digital transformation of the manufacturing industry.

The Korea Industrial Alliance Forum (KIAF) held a "Policy Debate for Presidential Candidates on Diagnosing the Crisis and Leap of the Manufacturing Industry Inviting 3 Million Manufacturing Workers" on the 24th. The presidential candidates promised to undertake regulatory reforms along with various policy supports to build a strong manufacturing nation.

At the debate, candidate Lee Jae-myung, through a congratulatory speech read by fellow party member Kim Kyung-man, stated, "In this era of great transformation, our manufacturing sector is seeking revolutionary changes to improve productivity in traditional manufacturing and transition to an industry that expands employment." He emphasized, "The government must boldly support the manufacturing sector’s innovation efforts with policies like Germany’s Industry 4.0 and the U.S. Manufacturing Renaissance," adding, "The first pledge of Lee Jae-myung’s new economic industrial transformation is innovation in core manufacturing through digital transformation."

Lee said, "To support manufacturing innovation and global market expansion, regulatory rationalization must also be achieved," and pledged, "We will actively review the proposals from the Industrial Alliance Forum, including the establishment of a global testbed and regulatory rationalization in the manufacturing sector." He further stressed, "To create quality jobs and nurture young talent, the government must invest generously and support new services related to manufacturing, including content, artificial intelligence (AI), software, and data. Through the continuation and development of public-private joint efforts, we will achieve an explosive employment manufacturing industrialization that surpasses the employment-expanding manufacturing industrialization of the U.S. and Germany."

Candidate Yoon Seok-youl, in a video congratulatory message, diagnosed, "Although we are a country lacking natural resources such as minerals and oil, we have become the world’s 10th largest economy through solid manufacturing-based industrial development. However, in the rapidly changing environment recently, our manufacturing industry stands at a crossroads between leap forward and stagnation." He expressed concern, "Between emerging manufacturing powers like China and Vietnam and traditional advanced manufacturing countries such as the U.S., Germany, and Japan, 180,000 manufacturing jobs have disappeared in our country, putting the manufacturing sector, the backbone of our economy, in a serious crisis."

Yoon emphasized, "It is time to review and transform manufacturing policies with a sense of urgency to improve the manufacturing sector’s structure," adding, "Above all, excessive regulations must be improved so that industrial creativity can be fully unleashed, and the digital transformation of manufacturing must be actively supported to prepare for a new leap in Korea’s overall industry." He pledged to spare no support for the revival and leap of Korean manufacturing.

Jeong Manki, Chairman of the Korea Industrial Federation Forum, is giving a greeting speech at the '9th Industrial Development Forum and 13th Automotive Industry Development Forum' held on the 25th at the Automobile Hall in Seocho-gu, Seoul. Photo by Mun Honam munonam@

Industry Proposes 11 Tasks to the Next Government

Following the congratulatory speeches of the presidential candidates, the industry sector made formal policy proposals at the debate. Chung Manki, chairman of KIAF, pointed out, "Our manufacturing sector’s share in domestic added value, total employment, and exports is all declining. If past trends continue over the next five years, real production and shipments will stagnate, and the ratio of our overseas direct investment compared to foreign direct investment (FDI) in manufacturing will increase from 3.8 times in 2019 to 17.6 times in 2026, raising concerns about industrial hollowing out." Chairman Chung warned, "The next president may face a situation where they inherit a deteriorated economy from the current president."

He noted, "Our manufacturing crisis is also due to various external factors such as the normalization of pandemics, expanded greenhouse gas regulations, digitalization spread, rearmament of advanced manufacturing countries, global supply chain disruptions, China’s rise, and intensified U.S.-China conflicts." Especially, he diagnosed that the rapid growth of China’s economic and technological power?evidenced by 135 Chinese companies in Fortune Global 500 last year compared to 122 U.S. companies, China’s top global manufacturing rank since 2010, and surpassing the U.S. in SCI papers since 2015?combined with the concentration of rare metals like rare earths in China and China’s control over global mines for batteries, has put Korean manufacturing in a difficult situation.

He explained, "Although the quantity of research and development (R&D) investment is among the world’s highest, domestic factors contributing to the manufacturing crisis include low productivity due to discriminatory policies against large corporations, high labor rigidity and low productivity, rapid workforce aging and low birth rates, polarization of income and purchasing power, and continuous strengthening of corporate regulations." According to the Industrial Alliance Forum, government regulations ranked Korea 87th out of 141 countries in the World Economic Forum’s 2019 competitiveness evaluation, comparable to Bangladesh at 84th and Ethiopia at 88th. Between 2017 and 2021, 3,950 regulatory bills were proposed by lawmakers, tripling the 1,313 bills during the Park Geun-hye administration. In 2020 alone, 1,510 new or strengthened regulations were introduced, a 55% increase from 2019. However, 96.4% of these, including the Serious Accident Punishment Act, were exempted from review by the Regulatory Reform Committee, and 83.8% were stipulated in subordinate laws or enforcement decrees.

Chairman Chung stated, "While not necessarily advantageous compared to foreign countries, we propose tasks to the next government to at least enable equal competition." The 11 proposals he requested are: ▲ Establish and operate a ‘Manufacturing Innovation Strategy Meeting’ chaired by the president ▲ Introduce a ‘two-for-one rule’ to eliminate outdated regulations ▲ Flexibly operate and supplement the 2050 carbon neutrality and 2030 carbon reduction plans ▲ Actively foster the hydrogen industry and hydrogen utilization industries ▲ Spread manufacturing revolution through digitalization of manufacturing ▲ Strengthen the public sector’s role in overseas resource development and securing raw materials ▲ Promote labor reforms including expanding labor flexibility ▲ Remove entry barriers to promote industrial innovation and consumer welfare ▲ Strengthen government organizations for manufacturing innovation ▲ Reform policies to improve R&D productivity ▲ Promote educational reforms to prepare for the Fourth Industrial Revolution era.

Following this, a discussion was held chaired by Hong Seok-woo, president of Sangji University and former Minister of Knowledge Economy, with representatives from major industries, Kim Tae-gi, honorary professor at Dankook University, Lim Chae-sung of the Democratic Party, and Jung Myung-ae, vice-chair of the Science, Technology, Innovation, and Economy Special Committee of the People Power Party’s National Sympathy Future Policy Group, in attendance.

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