South Korean companies find excessive regulations as the biggest obstacle to business and economic growth, while their peers in Japan are worried about stagnated economy and in China aging population, according to joint surveys.
Maeil Business Newspaper together with Japan’s Nikkei Asia and China’s Global Times carried out surveys on business leaders across the three East Asian countries. A total of 284 executives took part in the survey, with multiple responses allowed.
In Korea, entrepreneurs complain of “excessive regulation” as the biggest challenge to the county’s economy, with the largest 45 responses. Other factors were prolonged Covid-19 pandemic (40 responses) and the hike in real estate prices (23 responses).
Top concern among Japanese business executives was the country’s economic growth slowdown (36 responses) as well as waning competitiveness of Japanese industrial and corporate power (36 responses), followed by low birth rate and aging population (28 responses).
In China, business leaders are most worried about demographic challenges from low birth rate and aging population (42 responses). They also find the ongoing Covid-19 crisis as a big challenge to the local economy (27 responses) and the widening gap between the rich and the poor (22 responses).
Korean and Japanese executives picked the slowdown in domestic consumption and exports due to Covid-19 (32 responses each) as immediate common challenge. Chinese business leaders worried most about rising labor cost and shortages of workers (42 responses).
Supply disruptions of semiconductors and other components concerned businesses in Korea and Japan. They are trying to counter the challenge by strengthening ties with existing partners while developing new suppliers, as well as maintaining high inventories. They also have adjusted down output.
The second highest challenge cited by Chinese business leaders was the country’s economic slowdown.
Political unrest and policy dilemma were the third most picked challenge to businesses in Korea and China, 26 and 22 responded, respectively. In Japan, only two expressed concerns.
On facilities investment, 59.1 percent of Korean firms are planning expansion this year. Japanese businesses will stay equally active with 58.2 percent of survey respondents planning for expansion but only 25.2 percent of Chinese businesses have such plans.
Korean businesses are planning to expand capital expenditures in Korea, Southeast Asia, and the United States this year versus last year, while reducing investment in China.
Korean businesses anticipate sales growth in the United States and Southeast Asia, while projecting slower sales in China and Japan.
Chinese businesses expect active growth at home and slowed sales in the U.S. Among Japanese business, the U.S was the first choice.
By Kim Gyu-sik, Sohn Il-seon, Choi Hyun-jae, Shin Hye-rim, and Cho Jeehyun
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]