ED 'Is Korea desperate enough?'

The streets of Seoul are already bright with colorful lights and decorations for Christmas. Splashes of red and green and the glitter of small lights create a sense of abundance and festivity. The celebratory ambiance sits uncomfortably, however, here in the capital of one of Asia's export powerhouses. Korea has enjoyed a stellar export rally this year, yet the benefits have yet to materialize as improvements in the cost of living for everyday citizens. A social media post by Industry Minister Kim Jung-kwan on Saturday is raising the alarm over the jarring economic landscape.

Returning from a three-day trip to China, Kim posted to Facebook: "Are we desperate enough? Are we doing what is required?" He went on to say that he was struck with a sense of urgency during his trip, as he viewed how much China had developed. According to the minister, a Korean businessman he met during the trip had asked why the Chinese government was doing so much more to support its industries compared to Korea.

Kim's post required particular attention, as he was one of the key ministers involved in the $350 billion investment agreement with the United States reached last year. The industry minister is imploring the nation to regain its economic focus. Chinese companies — even in sectors where Korea has long been the leader — are quickly catching up. Chinese-made electric vehicles have arrived in Korea at competitive prices. An Oct. 28 report by Bloomberg Intelligence forecast that by 2030, China will be a global leader in eight out of 17 key sectors, including in large language models, humanoid robots and shipbuilding. The same report said that China will be catching up in areas like chip design, metal casting and memory by 2030, which is in line with Korean chips sector projections. Korea has about three years remaining before Chinese semiconductors are major competitors for domestic ones.

State-led industrial policy is a thing of the past. However, the pace of technological innovation in the era of artificial intelligence has made speed paramount — and that type of speed can best be achieved when the state and private enterprise work together. Having the state heavily involved in a country's economy may not always be the most efficient model, but the situational context must be considered.

Kim's remark also comes at a time when he and other officials including Labor Minister Kim Young-hoon are discussing the specifics of a proposed special bill. The ruling Democratic Party of Korea recently suggested creating an Act on Super-Regional Special Zones. Several rounds of consultations have been held to implement the legislation speedily. The bill is largely about balanced regional development and the "three megaprojects" announced by President Lee Jae Myung.

One of the more contentious issues in the bill is the deregulation of the current 52-hour workweek for the research and development sector for the megaprojects, as well as expanding hiring of temporary workers. While speed is vital for projects to improve Korea's global competitiveness, the bill has been slow in moving thanks to disagreements between the trade and labor sectors, the latter of which has taken a strong stand for worker protection. While state-led industrial policies may also result in side effects, both the trade and the labor side must find a way to cooperate on the issue.

The economic landscape, just like the geopolitical one, has been in flux for the past few years. The fallout from the U.S. midterm elections is not yet clear. When Seoul policymakers attend the Asia-Pacific Economic Cooperation meeting next week in Shenzhen, China, they should have their finger on the pulse of the Chinese economy.