Amcham head says 2020 is a big year to
be in business in Korea
[Korea JoongAng Daily] With the coronavirus pandemic, 2020 has been a tough year for businesses all over the world. But for multinational companies, Korea was the best location to be as a regional office, said James Kim, chairman and CEO of the American Chamber of Commerce (Amcham) in Korea.
“If you take a look at Europe or U.S. cities, they’re in a virtual lockdown whereas in Korea, yes, we may wear masks for the most part but we have never had a lockdown,” said Kim. “So they look at Korea as another market for them to increase revenue.”
Amcham Korea had its share of success thanks to such recognition, setting records for the most new members and events held in its 67-year history.
The Korea JoongAng Daily sat down with Kim to discuss what it was to be a foreign company in Korea over the past year and the pending issues for businessmen of both countries: The U.S.-China trade war, a new U.S. administration and an ongoing pandemic.
The first Korean-American to head the organization, Kim is now in his fourth year as Amcham Korea chairman and CEO. He previously served as chief executive at Korean units of Yahoo, Microsoft and General Motors.
Below is an edited excerpt of his interview on Nov. 11 at Amcham Korea’s headquarters in Yeouido, western Seoul.
Q. Korea was one of the first countries to be affected by the coronavirus and to have the government establish safety measures. For your member companies, was it an advantage being in Korea this year?
A. Obviously, the whole world knows that Korea did a fantastic job with Covid-19. I think that Korea may have invented the “3Ts” — from the testing, tracing to treating — which is really unprecedented. This turned out to be a very positive case for American companies that operate here to talk about the great things Korea has been doing to their company headquarters.
If you take a look at European or U.S. cities, they’re in a virtual lockdown whereas in Korea, yes, we may wear masks for the most part but we never had a lockdown. So they look at Korea as another market for them to increase revenue. One example is McDonald’s. They operate over 400 restaurants here, and this is the one of the few countries in the world where every store is in operation today.
Q. In the past few years, I’ve seen a lot of Korean IT firms complain that there’s reverse discrimination against them since the local government has a weaker grip on foreign companies here. What is your opinion on this?
A. I think that whenever companies do very well in any country, the regulators have to take a look at it. I see sites like YouTube and Netflix have done really well, but at the same time Korean companies like Naver, Kakao and Coupang — they’re all doing really well too and I think they also face similar challenges. So I don’t really bond with the notion that there’s a lot of discrimination going on at all. I just think it’s the nature of when you’re big, everyone’s going to have attention on you.
But despite that, American investors are still big in Korea. Last year, U.S. companies invested $39 billion dollars in stock here, employed 116,000 jobs here in Korea, and research and development [investment] was like $900 million last year alone. I think it goes to show you that despite any concept of discrimination, American companies have not stopped or lost enthusiasm to invest here. I expect a lot more than that.
Q. There’s anticipation that Hong Kong losing its power as an Asian financial hub may benefit Korea. Do you see that as a realistic scenario?
A. First and foremost, Hong Kong was not built overnight. It’s been there for a long time and took a long time [to be what it is today]. But I quite frankly think this is a good opportunity for Korea. With our declining population here, we need to become more of a global regional hub.
That’s why I applauded The New York Times for coming to Korea. I actually spent a lot of time with Stephen Dunbar-Johnson, international president of The New York Times Company. He explained his reasons for why they came here: One was obviously freedom of the press. The second, that Korea has amazing digital infrastructure so they can use this hub.
So I feel Korea is on the right track. But I also know it’s a sensitive discussion given the importance of China to Korea. The more Korean government touts “come here” it might be viewed as negative to China. But as someone who is an American citizen promoting businesses here, for both Korea and the United States, I’d like to see IT companies, national institutions and manufacturing regional hubs here.
Q. Have you received a lot of inquiries from companies to move from Hong Kong or China to Korea recently?
A. Yes, we have. I can't disclose names to you but The New York Times was such a visible decision. There are companies that are interested in expanding more in Korea just because Korea is getting a lot bigger. If you take a look at why the great companies are here, it’s not just because the market itself but because of the important partnership opportunities with companies like Samsung, LG and Hyundai. They’re huge global companies today, and if you want to have collaboration with them, they really should be here.
Almonty Industries, for example, is now producing the largest tungsten [mine] in Korea. They’re in the process of finalizing here. Right now, 80 percent of our tungsten comes from China. So this is the play where they’re going to diversify away from China. And tungsten is a very important resource for semiconductors and IT companies.
Q. Korea is a small market by population. Why do foreign companies want to come here?
A. Let’s talk about size. Population may not be that big, but it’s also the sixth largest trading partner of the United States. This is also the home to an export base to China where 30 percent of our exports go to.
The second thing is the geographic location. We’re close to all the different major Asian countries: China, Japan to Singapore. Third is the digital technology side — because of the ability to work with companies like Samsung and LG, a lot of innovation. People say if you can learn in Korea especially about things like the speedy customer service you can take that value or learning to anywhere else.
People also like living and working in Korea. In fact, I talk to a lot of the expats that are here and I don’t know a single CEO that said “I want to get out of Korea.” They all want to extend their stay. I think now with Covid-19, it has given them extra reason to be here. They’re safe.
Q. Korean companies and the government like to say that they’re moving past the stage of being a fast follower and are turning into a first mover. Would you agree?
A. I think it’s a combination. In some arenas Koreans can replicate what happened in the United States and do much better here. In some cases, [we see] Korean leadership, and Covid-19 is one example.
I think Koreans are innovators. They move really fast. When I worked in the IT business, Koreans invented phablets. I still remember [Apple’s] Steve Jobs, before he passed away, he actually said publicly, "over my dead body are we going to allow big phones." But guess what: Bigger phones are now doing so well.
And the drive-through for Covid-19 testing. That’s innovation from Korea right there in something as important as the pandemic. So those are couple of the examples I feel like the world can learn from Korea. Koreans’ “bbali-bbali ['quickly' in Korean] culture” can make that happen.
Q. The U.S. presidential election just ended this month with President-elect Joe Biden’s victory. What impact will that have on Korea and its relation with the United States?
A. First and foremost, Amcham is a non-political organization. Throughout my history at Amcham, we have worked with both Democratic and Republic presidents. Even the U.S. military here has worked on both sides. So for me, regardless of who winds up in office, I believe we have strong and smart people from both sides who will preserve this 70-year plus alliance between two countries. Because it’s not just commercial. It’s a cultural one, and obviously the military side of the equation makes it even move special.
As for President-elect Joe Biden, I met him in 2013 when he was sitting vice president. We had a very good dialogue. I remain very confident that he will be a very strong participant in the two's ties together. And he has a lot of people he has worked with — all the different ambassadors are in place, all the different people in the state department and administration. I feel like it’s going to be a continuation.
Q. A big issue for local businesses is the U.S.-China trade war. How do you see the situation going next year?
A. I think that China has always been a big concern for most Americans who are following the news. Under President Joe Biden, I think there will continue to be some pressure on a lot of different fronts not only on the commercial side but other social agendas that Americans have expressed concerns about, including freedom of press.
But from a Korea side, obviously Korea needs to be very careful in how they pick sides if they have to. And I hope no one’s asking them to pick any sides, but what I would look at is: The United States has had the closest relation with Korea for 70 plus years, so I think that bond will stay. But at the same time China is now becoming their largest trading partner [that accounts for] 30 percent of exports.
What I want to caution the Korean government is on diversification. Thirty percent to any one country, I think, is too big. If I was a business person selling widgets, I don’t want one customer representing 30 percent of my business, which is why I think Korea should diversify further away.
Q. What would you say is the biggest issue in the business realm for both Korea and the United States next year?
A. I’d say the most important thing is what happens to any second or third waves of the pandemic. We have a lot of events planned right now, including our upcoming inaugural ball in February. Over a thousand people historically participate, but this year we had to tone it down. And we have this Doing Business in Korea seminar which is going to be very, very big. Because of the pandemic, Korea has really escalated its public profile. At this seminar we want to showcase why Korea could take a lead and having more business opportunities here.
Q. Covid-19, I imagine, is an unprecedented event for you and your members. How does that effect Amcham in setting plans for 2021?
A. If you take away the travel and tourism this year, so many American companies are doing well. At Amcham, we’re going to have a record year this year — from the number of members that signed up, number of events we had, to the type of economics that we can generate.
This year has become the best year in our history because we transformed our business model from just having offline events to a lot of webinars. So that’s a digital transformation that we’re seeing. In fact, because we do so many webinars today that are produced at a high quality, we can get more people interested in participating. Whereas before, people would come in, they looked at it as a networking event. But here, it’s a lot of good solid business.
And I think because of the pandemic more people need organizations like ours to help them with advocacy, help them with marketing; they need more information from us and other types of networking opportunities.
We’re continuing to add to our employee base. We want to do more digital transformation — more video and virtual settings. Not just doing it at Zoom or Microsoft Teams, we want to make it really more multinational and really high quality so that any audience who calls in from anywhere can see a very high quality product. This can’t be done in the traditional PC [environment] anymore.
BY SONG KYOUNG-SON [firstname.lastname@example.org]