SK Group Chairman Chey Tae-won made the remarks during a South Korea-Japan special session at the 31st Nikkei Forum “Future of Asia” at the Imperial Hotel in Tokyo.
“South Korea and Japan are now in a situation where economic cooperation is essential,” Chey said. “The final stage of economic cooperation is becoming an economic community.” Asked what such a community would look like, he pointed to the European Union as a model and said, “I believe the final path is creating a common market.”
Chey said he had raised the need for closer economic cooperation at the same forum two years ago, but the global environment has deteriorated further since then. Both countries built independent manufacturing and export economies under the WTO system and free trade order. “Now that order has collapsed,” Chey said. “I do not think that system will return for the time being.”
He said the rivalry between the United States and China is likely to continue for decades. In that environment, South Korea and Japan risk becoming “rule takers” that follow rules set by larger powers, rather than “rule makers” that help shape the international order. Chey said the two countries must raise the level of cooperation to include not only economic issues but also security-related concerns.
“This is not just about making products together or cooperating at that level,” he said. “All forms of cooperation are necessary, including cooperation that covers both the economy and security.”
Chey said South Korea and Japan need greater scale to survive. “We need more size,” he said. “Only then can we survive in this jungle.”
He outlined cooperation across multiple sectors. On energy, Chey said South Korea and Japan should consider joint use, joint purchasing and joint stockpiling to reduce costs. “Energy costs must come down for the basic costs of society to fall,” he said. “Costs must also come down for common security.”
On electrification and AI infrastructure, Chey said the transition to a more electricity-based society requires massive investment, especially because electricity is difficult to store. “If we build together, we can reduce costs by 10% to 20%,” Chey said. “That can return as competitiveness for both countries.”
He identified semiconductors and AI as growth drivers and said strengthening that ecosystem would make both countries more resilient. “It would become difficult for any country to pressure our two countries,” Chey said. “We must make semiconductors, develop them into AI products and export them.”
Chey also cited healthcare as a field where cooperation could reduce costs linked to aging populations, and he said tourism should be part of the strategy, noting that few travel products currently package both countries as a single destination.
Chey proposed creating a permanent “big tent” organization to coordinate South Korea-Japan cooperation, including participants from government, political parties, and the private sector. He said many exchanges are already taking place but are not centralized, and a standing body could help create task forces, develop policy, and coordinate long-term cooperation.
He said the younger generation must be given a stronger sense of hope. “We need to spread the dreams of both countries to young people through exchanges,” Chey said. “Because expectations for future growth are low, dreams are becoming smaller and the power to look to the future, invest and research is weakening.”
Chey said South Korea and Japan could create a combined market of about $6 trillion in gross domestic product if they join forces. “I believe another $1 trillion in synergy can come from that,” he said. “Then young people who have been accustomed to low growth will be able to have more hope.”
He said SK Group intends to pursue long-term shared growth with Japan and is expanding investment in Japan, with a concept of reinvesting money earned there. “At the corporate level, rather than recovering money whenever possible, we need the concept of contributing to long-term shared growth in Japan,” Chey said.
The session was moderated by Mikio Sugeno, editor-in-chief of the Nikkei. Masakazu Tokura, counselor at Sumitomo Chemical, described the current international environment as an era of “realpolitik” where power and money carry more weight. Masahiko Kato, president of Mizuho Bank, said both economies are vulnerable to external shocks such as surging oil prices and maritime transport disruptions, noting Japan’s energy self-sufficiency rate is about 16% and South Korea’s about 22%, making both highly exposed to instability in the Middle East.