By Park Hyong-ki
The government has signaled that it is shifting its policy toward more friendly with conglomerates in a bid to inject new vigor into the slowing economy.
Stepping back from an earlier anti-chaebol policy, President Moon Jae-in and top economic policymakers are seeking to meet business leaders and calling for expanding investment.
The move comes as President Moon Jae-in's income-led growth has failed to achieve the intended outcome of creating more jobs, as his policies discouraged large enterprises from making new investments.
Finance Minister Kim Dong-yeon told reporters Thursday he will meet with company executives to ask for help in investing and creating jobs.
Kim said he will visit Samsung Electronics, the country's biggest company, where he is expected to sit down with Samsung Electronics Vice Chairman Lee Jae-yong for talks on ways to revive investment and create jobs.
"I will meet any executives of any companies, whether big or small, as long as we can help the private sector lead innovation," Kim told reporters at the Sejong Government Complex.
He also said he will plan talks with business-related organizations, including the Federation of Korean Industries.
Kim's urgency immediately followed the central bank's announcement of the country's GDP growth in the second quarter, which slowed to 0.7 percent.
The slowdown did not come as a surprise, but the negative facility investment created an unpleasant ripple, leading market analysts to reconsider further lowering Korea's growth forecast from 2.9 percent.
President Moon himself is rolling up his sleeves to encourage firms to make more investments.
He urged the finance minister recently to do all he can to boost "corporate morale."
He also sat down not only with Korea Chamber of Commerce & Industry Chairman Park Yong-maan, but also with executives of small- and medium-sized enterprises and young jobseekers to hear their thoughts on the economy over drinks.
Analysts believe this policy shift toward chaebol is inevitable to reverse the slowing of the economy.
They stressed that the Moon administration will need to redefine and redevelop its relationship with the private sector to improve confidence in businesses here.
This step will have to come before it can see some rebound in corporate investment, which hit bottom in the second quarter of this year.
"The administration needs to stop pushing companies into a corner and evoking public hostility toward them like they are some kind of menace to society," said Yun Chang-hyun, an economist at the University of Seoul.
"Now, it looks like the government is reaching out in an act of desperation because of sluggish growth figures. It needs to find consistency and direction as to how it seeks to push the economy forward with the private sector."
He added the government cannot just create 800,000 public jobs, saying the private sector will have to take a chunk of that number and lead job creation.
"The country will face difficulties to reach its desired growth of 3 percent, especially without further fiscal stimulus measures. Also, there is the ongoing trade dispute between the United States and China," said Han Yun-ji, an economist at Shinhan Investment.
Shinhan revised down its projection of Korea's growth from 3 percent to 2.8 percent, saying the country needs to achieve quarterly growth of at least 1 percent in the second half to reach 3 percent.
Semiconductors remained one of the few export goods able to keep the economy afloat.
And SK hynix further backs this, announcing a 3.5 trillion won ($3.1 billion) investment plan to build memory chip manufacturing plants that can create 350,000 jobs.
The government has signaled that it is shifting its policy toward more friendly with conglomerates in a bid to inject new vigor into the slowing economy.
Stepping back from an earlier anti-chaebol policy, President Moon Jae-in and top economic policymakers are seeking to meet business leaders and calling for expanding investment.
The move comes as President Moon Jae-in's income-led growth has failed to achieve the intended outcome of creating more jobs, as his policies discouraged large enterprises from making new investments.
Finance Minister Kim Dong-yeon told reporters Thursday he will meet with company executives to ask for help in investing and creating jobs.
Kim said he will visit Samsung Electronics, the country's biggest company, where he is expected to sit down with Samsung Electronics Vice Chairman Lee Jae-yong for talks on ways to revive investment and create jobs.
"I will meet any executives of any companies, whether big or small, as long as we can help the private sector lead innovation," Kim told reporters at the Sejong Government Complex.
He also said he will plan talks with business-related organizations, including the Federation of Korean Industries.
Kim's urgency immediately followed the central bank's announcement of the country's GDP growth in the second quarter, which slowed to 0.7 percent.
The slowdown did not come as a surprise, but the negative facility investment created an unpleasant ripple, leading market analysts to reconsider further lowering Korea's growth forecast from 2.9 percent.
President Moon himself is rolling up his sleeves to encourage firms to make more investments.
He urged the finance minister recently to do all he can to boost "corporate morale."
He also sat down not only with Korea Chamber of Commerce & Industry Chairman Park Yong-maan, but also with executives of small- and medium-sized enterprises and young jobseekers to hear their thoughts on the economy over drinks.
Analysts believe this policy shift toward chaebol is inevitable to reverse the slowing of the economy.
They stressed that the Moon administration will need to redefine and redevelop its relationship with the private sector to improve confidence in businesses here.
This step will have to come before it can see some rebound in corporate investment, which hit bottom in the second quarter of this year.
"The administration needs to stop pushing companies into a corner and evoking public hostility toward them like they are some kind of menace to society," said Yun Chang-hyun, an economist at the University of Seoul.
"Now, it looks like the government is reaching out in an act of desperation because of sluggish growth figures. It needs to find consistency and direction as to how it seeks to push the economy forward with the private sector."
He added the government cannot just create 800,000 public jobs, saying the private sector will have to take a chunk of that number and lead job creation.
"The country will face difficulties to reach its desired growth of 3 percent, especially without further fiscal stimulus measures. Also, there is the ongoing trade dispute between the United States and China," said Han Yun-ji, an economist at Shinhan Investment.
Shinhan revised down its projection of Korea's growth from 3 percent to 2.8 percent, saying the country needs to achieve quarterly growth of at least 1 percent in the second half to reach 3 percent.
Semiconductors remained one of the few export goods able to keep the economy afloat.
And SK hynix further backs this, announcing a 3.5 trillion won ($3.1 billion) investment plan to build memory chip manufacturing plants that can create 350,000 jobs.
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