Korea needs to expand investment in ASEAN, import good products more

The Association of Southeast Asian Nations (ASEAN) is South Korea’s largest source of trade surplus. The Northeast Asian country generated $34 billion of the surplus from the region out of total $45.6 billion last year.

ASEAN-Korea Centre Secretary-General Kim Hae-yong said it needs to further expand economic and cultural exchange between South Korea and ASEAN, adding “ASEAN, a land of opportunity, is a huge emerging economic zone.”

NEED TO CORRECT PLAYGROUND TILTED TOWARD KOREA

To improve ties, it is important to resolve the asymmetry in relations between South Korea and ASEAN, Kim told The Korea Economic Daily on Sept. 29 in an interview. The Southeast Asian bloc consists of ten countries – Singapore, Indonesia, Vietnam, Myanmar, Brunei, Cambodia, Laos, Thailand, the Philippines and Malaysia.

“Korea and ASEAN can develop into true partners only by correcting the playground tilted toward Korea,” Kim said.

The center was founded in 2009 to promote trading and expand investment between South Korea and ASEAN. The former ambassador to Myanmar and New Zealand has been leading the center since April.

“We need to develop Korea-ASEAN relations into a sustained friendly relationship,” Kim said. “To this end, it is essential to resolve a trade imbalance and improve Koreans’ understanding of ASEAN cultures.”

South Korea needs to provide technical supports to companies in ASEAN, while importing good products more from the region, Kim stressed.

“ASEAN-Korea Centre will play a role to correct asymmetry between Korea and ASEAN,” he added.

ASEAN WEEK IN SEOUL

Kim asked South Korean companies and consumers to pay attention to an “ASEAN Week” event to be held in Seoul on Oct. 5-6 to promote mutual exchanges on cultures, tourism and industries with the region.

He recommended individuals to see an exhibition of pictures and lifestyle on ASEAN that features sceneries and cultures, as well as foods made from rice on both online and offline. Companies can look for products from ASEAN and have business meetings with firms in the region during the event, he said.

The event also includes seminars on special economic zones and industrial complexes in the region, while providing opportunities to meet students in South Korea from the bloc.

NEED TO INVEST MORE IN ASEAN

South Korea needs to raise investment in ASEAN when competition between the US and China intensifies in the global markets, Kim stressed.

“ASEAN is expanding trade with the US and increasing exchanges with China. On top of that, we should not overlook the fact that ASEAN itself is becoming a production base and a huge market at the same time,” he said.

Vietnam, for example, grows more than 5% every year as global companies set up production facilities there. The Southeast Asian country has great potential for a consumer market given the country’s growing middle class.

“ASEAN with a population of 600 million is a huge economic bloc of a total $3 trillion gross domestic product (GDP),” Kim said.

The recent growth in Indonesia is also drawing attention due to Hyundai Motor Co.’s investment, Kim said.

“Local and foreign companies are paying keen attention to Indonesia with Hyundai building a factory near Jakarta by the end of this year.”

CRADLE FOR UNICORNS

ASEAN is also emerging as a unicorn cradle with numerous startups with great potential, Kim said.

“ASEAN has total 14 unicorns including Grab, a ride hailing platform, Kim said, referring to startup companies valued at more than $1 billion. “"A step behind the existing technology paradigm is rather a more advantageous environment for innovation industries to sprout."

South Korea and ASEAN will be able to create a great synergy if they form a platform to cooperate on future industries, Kim said.

ASEAN-Korea Centre has been fostering startups in ASEAN and building a foundation for cooperation between Korean and ASEAN startups by organizing an annual ASEAN-Korea Startup Week event since 2018.

Write to Ji-Hoon Lee at lizi@hankyung.com
Jongwoo Cheon edited this article.