Offshoring has taken heavy toll on Korean jobs over the last decade as domestic companies opted to expand production capacity overseas instead of home to capitalize on the tax incentives and better labor terms, according to a study by the Korea Chamber of Commerce and Industry (KCCI).
Hiring in overseas by Korean enterprises more than tripled to 1.63 million as of 2015 from 533,000 in 2005, whereas hiring by foreign companies in Korea increased to 271,000 from 199,000 over the 10-year period.
Several factors sent Korean companies overseas. Hankook Tire Co., for instance, has opened its first U.S. plant in Tennessee in March, motivated by recovery in the U.S. market and business-friendly policies of U.S. President Donald Trump to lure foreign investment into the U.S. The tire-maker plans to hire more than 12 million workers in the country to produce 1.4 million tires this year.
The nation’s second largest automaker Kia Motors Corp. completed its factory in Mexico last year and hired 15,000 workers locally in return for generous government offering of free site and tax exemption for the next 10 years.
From 2005 to 2015, Korea has attracted $46.4 billion in foreign direct investment (FDI), which is the 37th in global scale. While the share of capital outflow against the gross domestic product soared from 4.3 percent to 20.2 percent, the ratio of inflow grew from 11.7 percent to 12.7 percent.
By Kim Jung-hwan and Kang Young-woon
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]