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By Kim Hyun-bin
Korea's major business groups are expected to unveil massive investment plans soon after the country inaugurates a new president on Tuesday. President Yoon Suk-yeol has promised to create a business-friendly environment by easing regulations and expanding support for semiconductor manufacturers and other key industries, according to business officials Monday.
Pledging to create a dynamic economy by fostering a public-private partnership, the Yoon administration plans to secure competitiveness in future strategic industries such as semiconductors, artificial intelligence (AI), and batteries, designating them as national priorities.
The new administration has asked Samsung, Hyundai Motor, SK, LG and other conglomerates to increase investments and hire more workers on the grounds that corporate spending is needed to help the Korean economy deal with increasingly unfavorable conditions at home and abroad, including U.S. interest rate hikes, the war between Russia and Ukraine, and soaring raw material prices, the officials said.
"The Moon Jae-in government raised the corporate tax by 2 percent and implemented a lot of anti-corporate policies. Under the Yoon administration, which is set to adopt business friendly policies, companies will invest more than in the past," Kim Dae-jong, an economics professor at Sejong University said. "The Yoon administration made a promise to minimize regulations and revitalize businesses, so companies will be more active."
Major business lobby groups are calling on the incoming Yoon administration to ease unnecessary regulations and create a business friendly environment in return for large investments.
"The incoming government needs to take a lead in drastic regulatory reform in line with global standards and improvement laws and systems to advance labor-management relations to create a 'friendly business environment' that can enhance the dynamism of our economy and create a virtuous cycle of revitalization of corporate investment, job creation, and economic growth," the Korea Enterprises Federation said in a statement.
Samsung, the country's leading conglomerate, is expected to play a leading role in employment and investments to revitalize the economy.
In August, Samsung chief Lee Jae-yong announced that he would invest 240 trillion won over the next three years and hire 40,000 workers.
Lee is also expected to meet with U.S. President Joe Biden, who will be visiting Korea from May 20 to May 22.
During his visit to Korea, Biden is said to be promoting a meeting with major Korean business chiefs, including Lee.
Chey Tae-won, chairman of SK Group, who serves as chairman of the Korea Chamber of Commerce and Industry (KCCI), is accelerating investments especially in semiconductors, AI, batteries, biotechnolgy, which the company has designated as the conglomerates future growth engines.
SK Bioscience, which is developing Korea's first COVID-19 vaccine, was also included in the Yoon administration's national task.
Hyundai Motor Group, which played a leading role in the Moon Jae-in government's policy to foster a hydrogen economy, is expected to accelerate electrification in line with the new government's national task of expanding the supply of eco-friendly vehicles.
The incoming Yoon government announced plans to increase eco-friendly vehicles and strengthen the obligation to install EV charging facilities.
Hyundai Motor Group plans to expand its EV lineup expecting the demand for eco-friendly vehicles to drastically rise in the future.
LG Group is also expected to strengthen its battery business and EV component business.
The new government has announced that it will help secure the lead in the global market share for EV batteries.
LG Energy Solutions (LGES) is increasing the influence of batteries in the US market, including the decision to additionally build a joint EV battery plant with General Motors (GM), the largest automaker in the U.S.
"LG affiliates will carry on with their business and management direction as planned and will continue their investments," a LG Group official said.
