SK Group chairman proposes Korea, Japan led economic alliance

SK Group Chairman Chey Tae-won is speaking at the Tokyo Forum 2023. [Courtesy of SK SUPEX Council]

SK Group Chairman Chey Tae-won proposed an Asian economic community similar to the European Union (EU), with South Korea and Japan taking the lead.

Speaking at the Tokyo Forum 2023 on Thursday at the University of Tokyo in Japan, Chey highlighted the current Korea-Japan relationship, emphasizing its significant potential to become a larger economic bloc.

“Apart from China, Korea and Japan are the two largest economies in Asia. While the combined economic scales of these two countries may not compare with the United States, China, or Europe, it could be the starting point for a substantial economic cooperation bloc if it is linked with neighboring nations,” Chey said.

Chey also shared insights he obtained from traveling around the globe on business over the past two decades. “The era of a single global market is effectively over,” he said, adding that “now, countries form alliances with reliable partners and establish their own rules and standards. This particularly affects industries relying on the global value chain, such as semiconductors and electric vehicle batteries.”

While noting that both Korea and Japan have “benefited” from globalization for a long time, he stressed that the two countries are now facing imminent challenges and “need to step out of our comfort zones.”

Seeing Korea and Japan as economies “not large enough to survive alone,” Chey said they cannot overcome geopolitical divisions and weakening growth momentum alone, voicing the need to form an economic alliance as the two countries share broad commonalities in many areas.

“Successful cooperation between the two nations could not only address persistent issues of chronic low growth and societal problems like low birth rates and aging but also explore solutions,” he added.

Potential cooperation in sectors such as tourism and energy-related collaborations are also possible, with Chey suggesting that partnering for renewable energy and nuclear-related technology could not only address domestic energy issues but also facilitate exports and citing the success of the EU’s Airbus SE.

“There are many segments that bilateral cooperation would create synergies, from semiconductors, batteries, and bio to the financial sector. Starting with academic collaboration, it could be expanded to cooperation involving businesses and governments to build an economic bloc model,” he said.