Chey Tae-won Calls for 2-3 'Mega Zones' to Test Deregulation

Roundtable Chaired by Prime Minister Han Seong-sook

Chey Tae-won, chairman of the Korea Chamber of Commerce and Industry, said on August 28 that South Korea should move away from setting support and regulations based on corporate size and instead rationalize rules around an industry's growth potential. He also proposed creating test beds in the form of "mega zones" to verify the effects and side effects of regulatory reform.

Chey made the remarks at a regulatory rationalization roundtable for economic and business groups held at the KCCI building in Seoul and chaired by Prime Minister Han Seong-sook. He said industrial sites in South Korea face three gaps: time, place and innovation. As examples, he cited cases in which companies have been unable to invest in facilities for 40 years because of restrictions on idle land, where rice-cake production is allowed in the same industrial complex but bread production is not, and where innovative new drugs have been developed but remain effectively sidelined because of regulation.

As a solution, Chey proposed creating regulatory reform test beds. Rather than simply abolishing regulations, South Korea should set up two or three mega zones and use data to confirm whether deregulation works, he said. He also suggested using AI-based simulations to determine priorities for easing regulations.

Chey also called for growth-focused regulatory reform. For the past 30 years, using corporate size as the standard for both regulation and support has eroded companies' incentive to expand on their own, he said. South Korea needs to shift to an industry-tailored support system if the economy is to return to a growth track.

Ryu Jin, chairman of the Federation of Korean Industries, called for South Korea to adopt a negative regulatory system under which everything is allowed unless explicitly prohibited. Sohn Kyung-shik, chairman of the Korea Enterprises Federation, said the law should clearly state that management decisions are not subject to labor disputes and urged changes to labor-related regulations. Han said the government would remove regulations that can be eased quickly as fast as possible.

Ahn Si-uk, Hankyung.com reporter siook95@hankyung.com