SK’s Chey proposes South Korea-Japan economic bloc akin to EU

WASHINGTON, D.C. – South Korea and its closest neighbor Japan need to form an economic coalition, similar to the European Union (EU), to meet the changing dynamics in Asia, including the emergence of China as a strong rival, SK Group Chairman Chey Tae-won said.

The Korea-Japan economic bloc, if combined with their common ally, the US, would create a more powerful economic zone amounting to $30 trillion in value, he said at the Trans-Pacific Dialogue, a forum hosted by the Chey Institute for Advanced Studies, in Washington, D.C. on Monday.

“Korea and Japan have benefited from a global economic system such as the WTO. But not anymore. Things have changed a lot, including supply chains,” he said. “China used to be a large market for us. Now it has become a strong competitor in various fields, including energy, semiconductors and electric car batteries.”

The SK chairman said Korea and Japan face common issues such as an aging population, depopulation and low economic growth, making it difficult for the countries to maintain their economic status.

“If the two countries form a close economic coalition, similar to the EU, they can solve many problems together,” he said.

While calling Korea and Japan’s economies “complementary,” he said the EU started as a small economic group but eventually developed into one of the world’s largest markets.

JOINT LNG PURCHASES

Chey said energy is a key area where a close Korea-Japan economic coalition can create huge synergy.

“Korea and Japan import more than 30% of LNG production worldwide. If the two countries jointly purchase natural gas, it can generate synergy worth hundreds of trillion won,” he said.

If the Korea-Japan economic bloc is combined with the US economy, it would generate greater synergy that benefits all participants, he said.

Chey has been advocating for a fourth global economic bloc led by Korea and Japan.

The Chey Institute for Advanced Studies, established in 2018 to commemorate the 20th anniversary of the death of Chey Jong-hyon, the former SK Group chairman, is committed to identifying and analyzing geopolitical challenges and opportunities in Northeast Asia.

The Chey Institute also conducts thorough analyses of scientific innovation to look into the impact it would bring to the region and the entire world.

Write to In-Seol Jeong at surisuri@hankyung.com

In-Soo Nam edited this article.