New administration should accelerate deregulation
Big companies both at home and abroad are tightening their belts amid rising concerns about a global economic recession. The latest company to join the austerity drive was Apple, the world's leading tech giant. Bloomberg reported Monday that Apple would cut down on hiring and expenditures next year in some divisions to cope with a potential economic downturn. Apple reportedly made the decision to be more careful during uncertain times. Earlier, Google, another big tech behemoth, said it would slow the pace of hiring for the rest of the year while still supporting its most important opportunities. Microsoft laid off 1,800 employees across different regions as part of its structural readjustments.
Domestic manufacturing giants are bracing for growing recession risks by taking austerity measures, too. SK hynix postponed its factory expansion plan during its board meeting on June 29. The global chipmaker had planned to build a new semiconductor plant in the Cheongju Technopolis industrial complex at a cost of 4.3 trillion won ($3.3 billion), but shelved its expansion plan due to global business uncertainties. Earlier, LG Energy Solution said it was reassessing its 1.7 trillion won battery plant project in Arizona, citing unfavorable business conditions.
However, this wind of retrenchment may be just the beginning as major countries around the world are set to raise interest rates amid the prolonged Russia-Ukraine war. To begin with, setbacks will be inevitable for the massive investment plans the country's major business groups unveiled after President Yoon Suk-yeol took office, as the so-called "thee highs" ― high inflation, high exchange rates and high interest rates ― are likely to persist for a considerable while.
If businesses cut investment, it will affect employment and domestic demand negatively, throwing our overall economy into a tailspin. Certainly, now is the time for the new administration to create a virtuous cycle of more investment, strong production and brisk consumption with extraordinary determination. What's most urgent among other things is to spur the pace of deregulation to rekindle investment.
Big companies both at home and abroad are tightening their belts amid rising concerns about a global economic recession. The latest company to join the austerity drive was Apple, the world's leading tech giant. Bloomberg reported Monday that Apple would cut down on hiring and expenditures next year in some divisions to cope with a potential economic downturn. Apple reportedly made the decision to be more careful during uncertain times. Earlier, Google, another big tech behemoth, said it would slow the pace of hiring for the rest of the year while still supporting its most important opportunities. Microsoft laid off 1,800 employees across different regions as part of its structural readjustments.
Domestic manufacturing giants are bracing for growing recession risks by taking austerity measures, too. SK hynix postponed its factory expansion plan during its board meeting on June 29. The global chipmaker had planned to build a new semiconductor plant in the Cheongju Technopolis industrial complex at a cost of 4.3 trillion won ($3.3 billion), but shelved its expansion plan due to global business uncertainties. Earlier, LG Energy Solution said it was reassessing its 1.7 trillion won battery plant project in Arizona, citing unfavorable business conditions.
However, this wind of retrenchment may be just the beginning as major countries around the world are set to raise interest rates amid the prolonged Russia-Ukraine war. To begin with, setbacks will be inevitable for the massive investment plans the country's major business groups unveiled after President Yoon Suk-yeol took office, as the so-called "thee highs" ― high inflation, high exchange rates and high interest rates ― are likely to persist for a considerable while.
If businesses cut investment, it will affect employment and domestic demand negatively, throwing our overall economy into a tailspin. Certainly, now is the time for the new administration to create a virtuous cycle of more investment, strong production and brisk consumption with extraordinary determination. What's most urgent among other things is to spur the pace of deregulation to rekindle investment.
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