Businesses Fret Over “Frozen” Korea-Japanese Relations

As Korea-Japanese relations deteriorate due to Japan’s claim on Dokdo and distorted history textbooks, businesses in Korea are fretting over the plummeting relationship.

Although the entrepreneurial circle predicts that the diplomatic dispute will not spill over into the economy, they are concerned that any prolonged friction could affect economic ties in any way.

The most worried are the economic organizations that are preparing for large Japan-related events around mid-April.

The Federation of Korean Industries (FKI) has an investor relations meeting scheduled for April 11 in Okinawa, Japan. Samsung Electronics, Hyundai Motor Company, POSCO, Korea Electric Power Corporation and Hyundai Engineering and Construction will all participate.

The meeting is the FKI’s first one overseas in 2005, and it coincides with the Inter-American Development Bank’s annual general meeting. The annual meeting will be held from April 10 to 12 with 7,000 guests including government officials and businessmen from Latin American countries present.

Though the IR targets Latin American nations, the FKI is worried that the event might be interrupted because the venue is in Japan

FKI Executive Director Guk Seong-ho remarked, “Business is business. We will proceed with the Okinawa IR as planned. To be honest, we’re troubled by sour Korea-Japanese relations. I hope the relationship gets back to its normal state at the earliest possible time.”

In addition to the IR, the FKI will host a Korea-Japan-China joint business forum in Jeju Island in August, a Korea-Japan business conference in Tokyo in September, and other functions involving Japan.

Moreover, the Korea-Japan Economic Association is expected to hold a conference for Korean and Japanese businessmen from April 14 to 15 at the Hotel Shila in Seoul. At the conference, Samsung Electronics Vice President Yoon Jong-yong and Japan’s Federation of Economic Organization (Nippon Keidanren) Chairman Hiroshi Okuda will deliver keynote speeches. Approximately 300 high-ranking officials from major corporations and economic organizations of both countries will attend the conference.

Meanwhile, the Korea Chamber of Commerce and Industry (KCCI) plans to conduct a survey of companies about what the economic impact of current Korea-Japanese relations will likely be.

KCCI Executive Director Lee Hyun-seok said, “The KCCI will closely examine how the territorial dispute between Korea and Japan is affecting businesses and in what direction the situation will develop, and then we will produce countermeasures.”

However, with the public’s emotions running so high, the negative impact of the bad diplomatic ties on the economy cannot be easily made public. For that reason, the economic circle is feeling more burdened.

Sang-Soo Kim ssoo@donga.com