[Opinion] The “Dalian Drama”

By July 2010, a media report from the Chinese city of Dalian might read as follows: “Intel, the world’s largest semiconductor producer, completed construction of its plant in Dalian and has begun producing 300-milimeter wafer semiconductors. The plant created 5,000 jobs. Some 80 semiconductor-related companies have invested in the city following Intel.”

Dalian certainly deserves this honor since it successfully won Intel’s investment after more than three years of efforts in which it competed against other 20 global cities.

There were many obstacles to attracting the $2.5 billion facility. The U.S. government banned the establishment of a U.S. semiconductor plant in China because state-of-the-art technologies are embedded in the plant. But Intel persuaded the government because it was impressed by the business-friendly mindset of the city, which says, “We accommodate any demand from corporations.” Indeed, the city accepted all the picky requests from the company, including “logistical customs procedures which operate 24/7.” When the company wanted the lot beside the site for plant construction, the city accepted the request by relocating schools and homes in the lot that Intel wanted.

Korea was once considered a possible candidate for Intel’s investment together with China and Malaysia. However, the company said, “We are concerned if our plant would have to stop operation even for a few days because labor strikes are commonplace in Korea.” It also pointed out the fact that it is hard to hire and fire workers in Korea. Many labor unions of Korean conglomerates are departing from the militant labor struggle of the Korean Confederation of Trade Unions, but it has not been enough for dismissing the sense of uncertainty that foreign investors feel. Moreover, the government would not accommodate the picky requests of the company as China did. Therefore, the “Dalian drama” cannot be produced in Korea.

Korea attracted $3.4 billion of foreign investment in the first half of this year, a 31-percent drop compared with the corresponding period last year. The government seems to have given up competing with China in this sector because the gap is too wide. Such a situation is the product of the incumbent president, who irresponsibly says that the economy keeps working regardless of who is elected the next president, his administration, which stressing the desperate need for foreign investment while increasing regulations, and the country’s narrow-sighted nationalism which shows anti-foreign investment sentiment. The next administration should break away from this atmosphere.

Hong Kwon-hee, Editorial Writer, konihong@donga.com