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South Korea Elections 2022: Chaebol Reforms are Yet Again Nowhere in Sight

Lee Jae-myung (left), presidential nominee for the ruling Democratic Party of Korea, exchanges greeting with Yoon Suk-yeol (right), presidential nominee for the main opposition People Power Party, during an event held in Jongno-gu, central Seoul, on Wednesday. (Joint Press Corps)
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As South Korea votes for their next Presidential candidate, where do the chaebol reforms stand? Unfortunately, the Moon-Jae In administration did little to change the status quo of chaebols. Despite promises of carrying out reforms targeting chaebols and eliminating business-politics collusion, another less than satisfactory attempt by the Moon administration only shows the depth to which the business-politics nexus runs in South Korea. Over the years chaebol reforms have continued to receive lip-service from Korean politicians but to no avail. The reform process is crucial to democratisation, yet the current two major-party candidates, Lee Jae-myung and Yoon Suk-yeol, have leaned further away from conversation surrounding reforms, suggesting that the ongoing chaebol-centric economic framework is likely to persist. But this bears with it adverse impact on Korea’s already declining democracy as well as risks exasperating social issues – such as rising housing prices, lack of employment opportunities, etc. Political favouritism towards family-owned large conglomerates, a legacy left behind by dictator Park-Chung Hee, has been retained by every succeeding Korean leader, even after democratisation in the 1980s. In fact the post-democracy era only witnessed a more entwined arrangement between business and politics with both becoming mutual hostages to one another. Eventually, chaebol-state activity – of exchanging policy for bribes – became quasi-institutionalised. This is evident in the numerous political scandals that have become a feature of South Korean society. As one scholar mentions, “the exchange of money for political influence has been not just an open secret but common knowledge” (Kang, 2002, p. 177).

Rise of Chaebols

From its very beginnings chaebols have been linked to their political masters (Rama and Bronwen, n.d.). The government-guided economy, with tight control over economic institutions, that prevailed in the post-Independence era inevitably made the industrial class dependant on the government for allocation of various resources such as raw material and commodities. This also included special bank loans, allocation of U.S. dollars at favourable rates of exchange, and capital sums imported in connection with foreign aid programmes. This policy, of providing strong financial incentives, was thus responsible for the swelling up of a few favoured businesses into big conglomerates during the period from the sixties to the eighties. Moreover, it also appeared to have been employed to make up for the lack of legitimacy of Park’s dictatorial regime at the time, by providing for quick income increases and to appease the university students, who were the centre of dissent, by providing more job opportunities (Kang, 2002). Albeit under Park-led DRP (Democratic Republican Party or Minju Gonghwa Dang) the country saw accelerated growth and transformed from being an agrarian society to an industrialised ‘tiger economy’, corruption was rampant as the state intervention disproportionately benefited small business groups and political elites. To fund their political operations, donations in forms of bi-chagums (secret funds), were taken by chaebols in return for loans and favourable deals (Kang, 2002). These funds were utilised by the DRP to manage their large staff and budgets, but also to buy votes. According to the financial report of the Central Election Management Committee, the annual costs of running the DRP were as high as 4.5 billion dollars in the 1960s. Thus under Park, this financial system of exchanging policy for bribes came to be quasi-institutionalised (Kang, 2002). The integrated, top-down state had developed an all-engulfing hold on chaebols, wherein if the business people did not provide politicians with sufficient funds when asked, the Bank of Korea called in their loans, or they suffered a tax audit, or their subsidy application was denied (Kang, 2002). Nonetheless, under the Park regime a balance of power had been established between business people and politicians that kept corruption from spinning out of control (Kang, 2002). Since the business class was fragmented against a unified, dictatorial state, the leverage that they held over the government was limited. This, however,  witnessed a shift post-democratisation.

Post-Democracy Era

The transition to democracy benefited businesses more than the state as the state was now weakened with the rise of multiple parties and imposition of various bureaucratic procedures and institutions. Power that was centrally exercised by the government, under Park’s dictatorship, had too now become distributed. This resulted in chaebols being able to exert greater influence than usual over policy decisions. Democratisation did not change the business sector’s general high demand for rents, but it did affect the supply. With more politicians competing on the supply side, fewer limits were placed on the behaviour of the business sector (Kang, 2002). Thus, money began to be flushed into the political system at a much higher proportion (Kang, 2002). The chaebols increased their expenditure towards political funding so as to obtain orders to undertake any project in South Korea. Hence, for the chaebols, it could be said, that the ease of doing business was more restricted. Since even the smaller bureaucratic wing had veto power and thus money had to be siphoned at every stage before getting a bureaucratic approval (Kang, 2002). In 1996, political parties officially reported raising 420 million dollars. If compared to the United States, a country six times the population and an economy fifteen times larger, the Republican Party’s fundraising goal was 179 million dollars in 2000 (Kang, 2002). This phase also witnessed the formation of an interdependent relationship between the political and economic elites, who mutually reinforced the legitimacy of each other’s practices: with the state defending its behaviour as ethical as it disciplined the chaebols to deliver economic growth, while the chaebols argued that the Korean economy would not have propelled to the high levels it had achieved had chaebols not been granted extensive privileges by the government (Hidehiko, 2018). This, of course, came at the cost of – 1) small and middle scale businesses who simply could not compete and hence either got amalgamated into larger companies or failed to operate and 2) static legal and corporate reforms that were overlooked to allow for corrupt activities to flow.

Chaebol-State Relationship

Thus, the politics-business collusion is of grave importance to Korean society that severely undermines its democratic fabric as well as limits the proliferation of a socially integrated market economy. Chaebols absorb technology from SMEs (Small and Mid-Sized Enterprises), while also putting them under constant pressure to reduce prices. This not only results in wage inequality, but also deprives SMEs of the resources needed to pursue business innovation (Hidehiko, 2018). The 1997 Asian financial crisis was expected to act as a watershed moment for Korea’s political economy. Unfortunately, except for a few minor, internal, corporate changes and need of the hour government policy reforms, not much changed. The reforms particularly focused on structural improvements; since governance deficiencies, including inadequate corporate governance and government supervisory systems, were one of the factors that led to the currency crisis (Hidehiko, 2018). Specific measures were based on the items on which agreement had already been reached with the chaebol, including increased management transparency, the elimination of reciprocal debt guarantees, the improvement of financial structures, specialisation in particular industries, and the improvement of management accountability (Rama and Bronwen, n.d.). Albeit no radical changes concerning the control of the chaebol by their founding families were made. Where the crisis would have been considered as a catalyst, even today Korean politicians have typically tried to excuse their relationship with chaebol through political corruption as functional (it is not wrong because it is good for the economy), as an institutional privilege (it is not wrong because other members accept it) or as an institutional fault (it is not wrong because other members do it) (Rama and Bronwen, n.d.).

In modern South Korea, the vast majority of capital has been channelled into state-approved chaebol projects and thus political influence becomes crucial to chaebol’s capacity to secure access to capital. In this context, institutional and legal arrangements emerged to both facilitate and disguise the consequent flow of funds from the corporate world into the political sphere (Rama and Bronwen, n.d.). For instance, it has been a standard practice for the heads of chaebols to be given lenient sentences followed by presidential pardons when they are found guilty of crimes. Since 1990, the heads of seven of the ten biggest chaebols have been convicted for bribery, tax-evasion or embezzlement. All received presidential pardons, and all returned to management positions (Rama and Bronwen, n.d.). The same impunity also extends to previous political leaders – former President Park Geun-hye who got impeached and arrested, but later released, following the exposure of series of scandals related to leaking confidential government information in exchange for contribution. Moon administration, much like every preceding administration, although initially took a strong stance against chaebol-politician collusion, did little to change the status quo. Instead, much like the nature of Korean politics in the past, even his administration came under attack for collusion with the chaebols. Furthermore, Moon’s reliance on the chaebols to bring about change through self-reform was short-sighted and served little to no purpose.


Ahead of the current election, both Lee Jae-myung and Yoon Suk-yeol have already been associated with scandals. Furthermore, unlike during previous elections when chaebol reform was one of the key issues, the presidential candidates this time have barely talked about it during their respective campaigns. By addressing the current issues of high housing rates and unemployment in isolation to the chaebol-centric economy, both Lee and Yoon show lack of vision to reform the existing structure. ‘Political retribution’ has been internalised by the economic and political elites and has become an essential tenet of governance in South Korea. This  in turn has aided in perpetuating a cycle of preserving an economic policy that bears expedient gains for the political class but hurts discernible socio-economic interests of the people and degrades the political fabric of the state.

Nehal Dadhich is a final year student of Jindal School of International Affairs where she is pursuing B.A. in Global Affairs. She has previously interned as a Risk Analyst at WoRisGo, a governance, risk and management firm. Her interest areas include analysing concerns pertaining to global security as well as studying culture and politics.

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Assad’s visit to China: Breaking diplomatic isolation and rebuilding Syria

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Chinese President Xi Jinping meets with Syrian President Bashar al-Assad in Hangzhou, capital city of east China's Zhejiang Province, Sept. 22, 2023. (Xinhua/Yao Dawei)

The visit of Syrian President Bashar Al-Assad to China to participate in the opening of the Asian Games came as a serious step to try to break the diplomatic isolation from Syria.  Syrian President “Bashar Al-Assad” was keen to meet his counterpart Xi Jinping in the city of Hangzhou in eastern China, where the Asian Games are being held, as this was the Syrian president’s first visit to China since 2004.  According to the Syrian regime’s Al-Watan newspaper, Al-Assad will attend the launch ceremony of the (nineteenth edition) of the Asian Games, which will open on September 23, in the Chinese city of Hangzhou.  This visit to Bashar al-Assad reflects the great coordination between Moscow and Beijing, as it is likely that the Russians pushed for this visit at this precise time.  Perhaps, through his visit to China, Bashar al-Assad is trying to deliver a specific message about the start of “international legitimization” of his regime.  Syria’s accession to the Belt and Road Initiative in January 2022 is an indication of the possibility of implementing vital Chinese projects, especially since it is located between Iraq and Turkey, making it a vital corridor for land routes towards Europe.

 Bashar Al-Assad’s visit to China also comes in an attempt to attract it to reconstruction projects in the affected areas in Syria, as China has the ability to complete reconstruction infrastructure in residential and civilian areas with exceptional speed. This is the same as what the Chinese ambassador to Syria “Shi Hongwei” announced in August 2023, that “Chinese companies are actively involved in reconstruction projects in Syria”. The war in Syria led to massive destruction of infrastructure and the destruction of many vital sectors of the Syrian economy, including oil, while the Syrian government is subject to harsh international sanctions.  We find that the Chinese side has shown great interest in the reconstruction projects in Surba, such as the presence of more than a thousand Chinese companies to participate in (the first trade exhibition on Syrian reconstruction projects in Beijing), while they pledged investments estimated at two billion dollars.

  China played an active role through diplomatic movements in Syria, as it participated in the “Astana” process, and obstructed Security Council resolutions related to Syria, to confirm its position in support of Damascus, using its veto power more than once in the Security Council, against resolutions considered to be a blow to Assad’s “legitimacy”.  In September 2017, the Syrian regime classified China, along with Russia and Iran, as “friendly governments” that would give priority to reconstruction projects. Therefore, Al-Assad affirmed during his meeting with Chinese President “Xi Jinping” that: “this visit is important in terms of its timing and circumstances, as a multipolar world is being formed today that will restore balance and stability to the world, and it is the duty of all of us to seize this moment for the sake of a bright and promising future”.

  According to my analysis, China follows the policy of “breaking diplomatic isolation on presidents and countries against which America is angry”, so the visit of “Bashar al-Assad” comes within a series of visits that China witnessed during the current year in 2023, to presidents who are isolated internationally by the United States of America, such as: Venezuelan President “Nicolas  Maduro”, the Iranian President ”Ibrahim Raisi”, and the Belarusian “Alexander Lukashenko”.

  China is also keen to conduct interviews in its newspapers and official websites affiliated with the ruling Communist Party with many presidents and officials of countries isolated internationally and diplomatically by the United States of America and the West, such as the Chinese keenness to conduct and publish an interview with Syrian Foreign Minister “Faisal Mekdad” on September 21, 2023, and the Chinese reviewed his statements, saying that “the United States of America has plundered oil, natural gas, and other resources from Syria, causing losses worth $115 billion”. The Chinese newspaper “Global Times”, which is close to the ruling Communist Party, also focused on the United States’ greater role in the deterioration of “Syria from stability to chaos” . The Chinese newspaper compared this to China’s policy, which constantly calls for peaceful dialogue and opposes “foreign interference” .

   Through his visit to China, Syrian President “Bashar Al-Assad” is trying to lay the foundations for joint cooperation between China and Syria within the framework of the Belt and Road Initiative, with full Chinese support for Syria’s accession to the Shanghai Cooperation Organization as a dialogue partner. China has always affirmed its firm support for Syria’s efforts against foreign interference, with the Chinese rejection of the stationing of illegal forces on Syrian territory. China is also making great efforts with many countries to lift sanctions and the illegal economic blockade on the Syrian people, in addition to Chinese support for building Syrian capabilities in the field of combating terrorism. Knowing that despite its alliance with President “Bashar Al-Assad”, China did not participate in supporting him militarily, but it used the right of criticism to obstruct the passage of resolutions against him in the Security Council.

   We can reach an important conclusion that Bashar Al-Assad’s visit to China has a greater political track, and that Beijing is trying to play a greater role in the issue of resolving conflicts or to have a greater actual role in negotiations related to sensitive issues in the region. The implications of Assad’s visit to China are also politically significant, as China is trying to play a greater political role in the region, as China has been trying since the start of the Russian-Ukrainian war and the emergence of a vacuum in the Middle East as a result of the decline of Russian influence due to its preoccupation with the war, so Beijing is trying to expand in the Middle East and Africa. 

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China’s Inclusive Diplomacy for Global Cooperation

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President Xi Jinping’s address at the recently held 2023 CIFTIS resonates as a powerful call for inclusive development and cooperation in the services trade sector. China’s commitment to expanding market access, increasing connectivity, and aligning policies with global standards demonstrates its commitment to ensuring a level playing field for all nations.

This commitment extends across different sectors, including telecommunications, tourism, law, vocational examinations, and the larger services sector. President Xi’s address emphasized China’s intention to expand broader, broaden market access, and support inclusive development in the services trade sector. His sentiments resonate with the global world as China seeks to create new prospects for openness, cooperation, and economic equality.

Over the last few decades, the services trade landscape has changed drastically, becoming an essential component of international business. However, this expansion has not been uniform, with developing countries frequently encountering difficulties such as limited market access, complex rules, and capacity limits that prevent them from fully participating in international services trade.

Notably, China is committed to promoting inclusive growth in the services trade sector. It assured of taking continuing steps to accelerate Chinese modernization through high-quality development, to open up new avenues for openness and collaboration for all countries.

Through openness, cooperation, innovation, and shared services, China emphasized the need for inclusive growth and connectivity. Recognizing that a rising tide in services trade should raise all boats, particularly those from nations with limited resources, China has launched a series of ground-breaking initiatives. Additionally, China is actively expanding its network of high-standard free trade areas, participating in negotiations on the negative list for trade in services and investment.

China is setting an example by aligning its policies with international standards. President Xi highlighted in his speech that national integrated demonstration zones for increased openness in the services sector, suitable pilot free trade zones, and free trade ports will be at the forefront of aligning policies with high-standard international economic and trade regulations. These zones demonstrate China’s commitment to fostering an atmosphere conducive to international cooperation and growth.

Real-world examples vividly demonstrate the practical impact of China’s assistance to developing countries in the services trade. China’s investments in transport infrastructure, such as the Standard Gauge Railway, have considerably facilitated the flow of goods and people in Kenya, boosting the services sector indirectly.

Pakistan’s experience with the China-Pakistan Economic Corridor (CPEC) is similar, with improved physical connectivity catalyzing the expansion of digital services and e-commerce. Various infrastructure developments in Indonesia have resulted in spectacular advances, opening up new potential for services trade.

Ethiopia, too, has reaped the benefits of China’s commitment, with active participation in industrial parks reviving the services sector, which includes logistics, banking, and education. These real-life success stories highlight China’s critical role in facilitating the expansion and development of services trade in developing countries.

China’s commitment to capacity building and technical aid is critical in its support for developing countries in the services trade. China provides these countries with the knowledge and skills they need to participate effectively in the services trade by offering specialized programs. Furthermore, China’s significant investments in infrastructure projects such as ports, logistical hubs, and telecommunications networks play an important role in facilitating the smooth flow of services.

Furthermore, China’s commitment to reducing entry barriers and optimizing regulations indicates the country’s persistent commitment to creating an equitable environment. This approach not only promotes equitable possibilities but also simplifies market access, making it easier for developing countries to export their services to China’s enormous and dynamic market.

Furthermore, China gives significant financial support in the form of loans and grants for service trade-related initiatives, recognizing the financial problems that many developing countries confront. This financial assistance enables nations to overcome economic challenges and invest in the expansion and improvement of their service sectors, thereby encouraging economic equality and cooperation.

As the world continues to evolve, services trade will play an increasingly important role in global economic growth, and China’s leadership in this realm is helping to shape a future where opportunities are shared, disparities are reduced, and cooperation knows no bounds. It is a vision worthy of appreciation and support since it is consistent with the ideals of justice and equality, moving the globe closer to a more linked and wealthy global community.

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China’s Multilateral Engagement and Constructive Role in the G20



Image source: X @narendramodi

The recent G20 Summit in India has once again taken center stage, attracting global attention as it gathered together leaders and delegates from the world’s 20 most powerful economies. This high-profile event was significant in shaping international relations and addressing serious global concerns due to its broad presence and crucial talks. This high-stakes gathering occurs at a pivotal juncture, marked by escalating divisions among major powers on a multitude of pressing global issues, including the Russia-Ukraine conflict, global economic recovery, food security, and climate change.

The recent inclusion of the African Union (AU) as a permanent member within the G20 serves as a positive signal, signifying consensus among major economies. However, lurking concerns persist about the formidable challenges involved in achieving unity and issuing a joint declaration in the midst of these complex global dynamics.

Chinese Premier Li Qiang’s opening remarks at the 18th G20 Summit in New Delhi resonate as he underscores the paramount importance of unity and collaboration among G20 member nations. He emphasizes the critical need for effective coordination of macroeconomic policies to restore hope and generate momentum for long-term economic growth.

 Premier Li eloquently highlights the interconnectedness of humanity’s destiny and calls upon nations to demonstrate mutual respect, seek common ground while momentarily setting aside differences, and work tirelessly towards peaceful coexistence. In a world characterized by profound crises and shared hardships, he aptly observes that no nation can thrive in isolation. Therefore, the only plausible pathways for guiding humanity forward are those rooted in cooperation and harmony.

The G20, originally established to navigate global financial crises and forge collective strategies for addressing economic challenges while fostering global economic development, has, regrettably, experienced a decline in consensus and a rise in differences among major powers. This shift has been particularly evident since the onset of the Ukraine crisis and the United States’ strategy of containment against China. Consequently, the G20 is increasingly devolving into a forum marked by discord, rather than the once-productive and constructive multilateral mechanism it was intended to be.

Nevertheless, the G20 retains its significance as a pivotal forum for international collaboration in confronting global challenges. With the increasing contributions of developing nations like China, India, and African countries, the voices within the G20 have diversified, no longer solely dominated by Western perspectives. As a response, the United States seeks to regain control of the multilateral process to further its agenda of great power competition. However, this approach is unlikely to be warmly received by the broader international community.

China remains steadfast in its commitment to deepen reforms and open up further to foster high-quality development and its unique brand of modernization. China views itself as a catalyst for additional momentum in global economic recovery and sustainable development. China stands ready to collaborate with all stakeholders to contribute to the well-being of our shared Earth, our common home, and the future of humanity. Despite Western media’s attempts to sensationalize China’s stance and magnify perceived differences, China continues to play a constructive role within the G20, dedicated to its multilateral mission.

To ensure that the G20 remains a platform focused on global governance rather than being overshadowed by geopolitical conflicts, China remains determined to fulfill its constructive role within the group, regardless of attempts by Western powers to politicize the mechanism. China’s efforts have expanded the G20 to include the African Union, effectively transforming it into the “G21.” China was the first nation to endorse African Union membership in the G20 and advocates for the African Union to assume an even more significant role in international governance.

The growing divisions and disputes within the G20 have eroded its effectiveness as a platform for addressing global challenges. These divisions, primarily driven by American actions and policies, have spawned tensions with far-reaching global implications, from the Ukraine crisis to escalating tensions in the Asia-Pacific region, particularly in the Taiwan Straits and the South China Sea. These developments underscore the critical role the G20 plays in promoting cooperation and unity.

Amid the current geopolitical landscape characterized by major powers’ divisions, tensions have surged, resonating globally and causing ripple effects. From the Ukraine crisis to tensions in the Asia-Pacific region, particularly in the Taiwan Straits and the South China Sea, the significance of the G20’s role in fostering cooperation and unity cannot be overstated.

All G20 member nations must recognize the urgent imperative of cooperation in building a world that is safer, more prosperous, and increasingly peaceful. Given the global challenges that transcend narrow national interests, effective responses can only be crafted through international cooperation. The G20 stands as a pivotal arena for this cooperation, with China’s positive contribution being indispensable in promoting cohesion.

Despite Western media’s efforts to sensationalize China’s position and magnify perceived gaps, China remains a committed multilateral partner within the G20, dedicated to constructive engagement. The G20 continues to serve as a critical platform for addressing global concerns, fostering unity, and promoting international collaboration. As the world grapples with intricate issues, it remains imperative that nations adhere to the principles of multilateralism and collaborate relentlessly to secure a more prosperous, peaceful, and sustainable future for all.

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