At a gathering of the European Chamber of Commerce in Korea (ECCK) on March 8, members expressed ambivalent yet honest sentiments about the business environment of Korea.
The meeting was designed to discuss the results of a survey of 139 European companies with business stakes in Korea. Conducted in November last year, the survey was co-conducted by Roland Berger, a Germany-based corporate consultant company on behalf of Maeil Business Newspaper and the European Chamber of Commerce in Korea (ECCK). Jung Hun-taek, the principal of Roland Berger presented the survey results, and Christoph Heider, the ECCK secretary-general, led the discussion.
According to the results of the survey, 55.8 percent of the respondents said they were content with their achievements in Korea last year, more or less unchanged from 55.9 percent in 2014. The amount of those willing to expand business and investment here increased to 57 percent in 2015 from 49 percent in 2014.
The murky outlook derived primarily from the anticipation of the poor performances of both the Korean and global economies. Concerns about the won’s volatility and high labor costs were also cited. By industry, those involved in consumer goods and retail and automobiles expressed plans for future business expansion in Korea, whereas those in the financial sector expressed no plans.
Negative sentiments and outlooks, however, were conspicuous in the area of the enforcement of regulations, as it turns out that frequent changes in regulations cause confusion in foreign businesses. Moreover, given the fact that foreign companies tend to be slower in adapting to frequent changes, the impact of uncertainty in the regulatory environment is stronger on foreign businesses than local.
Heider pointed out the consumption tax case as one example, saying, “The government raised the ceiling for the consumption tax from items priced at 2 million to 5 million won with a view to boosting consumption. However, it soon lowered the ceiling again to 2 million won two weeks later, as the previous strategy failed.”
Heider added, “We need to have a reliable regulatory environment for pricing, system and marketing strategies.”
Asked about any attempts on the ECCK members’ part at communicating with policymakers in Korea and what business communication format they prefer, Heider said, “We would like to interact with officials at various levels but prefer those at the working levels.”