ed Let more firms return

More Korean companies are jumping on the bandwagon of bringing back their manufacturing home in the face of worsening management conditions abroad.

Since the government unveiled a package of support measures for the so-called “U-turn’’ firms a year ago, more than 10 jewelry companies have moved their production lines from China to Iksan, North Jeolla Province. Earlier this month, Busan City signed a memorandum of understanding with four local footwear manufacturers to relocate their manufacturing operations during the first half of next year.

The reshoring trend is expanding into such technology-intensive industries as electronics, machinery and automobile components. Rising labor and raw materials costs, tax increases and toughened regulations are cited as the main reasons behind their return. Whatever the reasons, it is a welcome move that can help boost job creation and growth.

The United States stands out in luring back its companies abroad. A survey by the Boston Consulting Group shows that 37 percent of large American companies are considering transferring manufacturing to the U.S. from China where wages have been going up over 15 percent each year.

The number of firms to have “reshored’’ manufacturing to Korea is still meager, given that a number of large Korean employers have relocated their manufacturing to China and other Southeast Asian countries under the offshoring drive since the middle of the 1990s. In fact, Samsung Electronics is making nearly 80 percent of its mobile phones at overseas plants and Hyundai Motor assembles more than half of its cars abroad.

This fact raises the possibility that much more Korean businesses can move back their overseas operations, depending on how the government provides attractive incentives for the returning companies. And this will be one of the viable measures that could help President Park Geun-hye keep her campaign promise to raise the employment rate to 70 percent amid the prolonged downturn.

In beckoning companies abroad, Korea can boast narrower-than-before wage gaps, skilled workers, free trade deals with major economies and the upgraded “Made-in-Korea’’ tag. However, there is still a long way to go, especially in terms of labor costs and affordable workforce. Simply put, bringing back local businesses abroad on a large scale is impossible for now.

The key is to create an environment friendly to returning companies. Specifically, the government needs to provide bolder tax and other incentives so that they can reduce their financial burden upon returning. And the smooth provision of skilled workers is a must, considering that many of them went abroad due largely to labor shortages.