Around the issue of the original labor of the South Korean Supreme Court ruling japanese companies to compensate, there have been arguments within the Japanese government about economic sanctions, which has made South Korea more vigilant. The South Korean government has hinted that it will discuss countermeasures, but is also very worried that economic sanctions will deal a serious blow to the Economy of Japan and South Korea, which is in a horizontal division of labor (cooperating with each other in their respective areas of expertise). The Japanese and South Korean diplomatic services will hold director-level consultations on the 14th, but in the absence of a solution prospect, the uneasiness in the industry is spreading.
According to the Nihon Keizai Shimbun reported on March 14, the source of South Korea's increased vigilance was the speech of Japanese Finance Minister Taro Aso in his reply on the 12th. Referring to specific retaliation methods, Aso said: "I think it is not only tariffs, but also various retaliatory measures such as stopping remittances and issuing visas." "This statement shocked South Korea very much.
According to the report, the suspension of remittances, as an example of Aso Taro, could pose a serious obstacle to businesses doing business between Japan and South Korea. The suspension of visa issuance will sharply reduce the number of South Korean tourists visiting Japan in 2018, which reached 7.53 million, and may also affect inbound spending.
South Korean media reported that Japan has emerged a plan to limit the export of strategic materials such as hydrogen fluoride, which is necessary for semiconductor manufacturing, a pillar industry in South Korea. A senior south Korean government official said on the 13th: "Although we have not received any notice of economic retaliation from Japan, we are making every preparation." ”
According to reports, the plaintiff's legal team, which won the original labor lawsuit, is speeding up the seizure of assets of Nippon Steel Sumitomo And sumitomo and Mitsubishi Heavy Industries, which has exacerbated the uneasiness of the Japanese side. Despite this, the South Korean government has not yet announced its response or responded to Japan's request for consultations based on the Japan-South Korea Claims Agreement.
According to the Nihon Keizai Shimbun, most believe that Aso's speech is a warning to the South Korean government and should not actually go this far, but for companies, it is a disturbing factor.
Among South Korea's exporters, Japan fell from second place in 2000 to fifth place in 2018, while China jumped to the top spot. Some voices pointed out that Japan's declining sense of presence at the economic level is also one of the reasons for the South Korean government's slow response to the original labor problem.
However, the pattern of South Korean representative companies such as Samsung Electronics and SK Hynix relying on Japan for parts and materials has not changed. South Korea's trade deficit with Japan in 2018 reached $24 billion ($1 is about 6.7 yuan).
For Japanese companies, South Korea is a "country that can make money." According to the Japan External Trade Organization, south Korea, with 85 percent of Japanese companies stationed in Asia and Oceania, is expected to be profitable in 2018. It is 72% in China and 67% in Thailand.
According to the report, if the Japanese government adopts countermeasures such as restricting exports or imposing high tariffs, companies in both Japan and South Korea will suffer. Executives of Japanese semiconductor-related raw material manufacturers said worriedly, "The industry in Japan and South Korea belongs to the horizontal division of labor. South Korea will fall, Japan will fall, and it will have a serious impact on global supply chains."
According to reports, intergovernmental rivalries have also cast a shadow over exchanges in the economic community. The Japan-Korea-Japan Economic Association postponed the "Economic People's Conference" scheduled for May in Seoul until after September.
File photo: Japanese Finance Minister Taro Aso (right). (Reuters)