Global ‘investment war’ looms: Kofia chairman

The chief of South Korea’s capital investment business association on Tuesday urged the nation to prepare for a looming global “investment war,” which he views as a global phenomenon that will soon supersede the ongoing trade war in importance.

Kwon Yong-won, chairman of the Korea Financial Investment Association, stressed the need for investment firms to keep pace with global “innovative growth” and to lay the groundwork for tech entrepreneurship with substantial capital investments. This, he said, should be further encouraged by state policy, which he said had already taken a positive turn with measures announced earlier in November.

“The US-China trade war and the upcoming tariff talks are the talk of the town now, but we have to also heed the underlying global investment war,” he said.

Kwon cited US e-commerce giant Amazon.com’s investment in mergers, acquisitions, research and development. In 2017, Amazon.com’s spending on M&A came to over $14 billion, according to CB insights, while its R&D spending reached $22.6 billion.

He also highlighted the success of Google’s self-driving technology spinoff Waymo, which achieved test drives of some 10 million miles thanks to “unwavering investment” over the course of eight years.

Such moves in the US to gain the upper hand in technology are counterbalanced by moves from China’s Guangdong province to create a financial hub as a Chinese answer to Silicon Valley in the United States.

“While the trade war is a current matter, the investment war is a future one,” Kwon said.

The Kofia comprises securities firms, asset management firms and investment advisers under its umbrella.

The remarks came a week after representatives of Korea’s financial investment firms paid a five-day visit to the San Francisco Bay area and Seattle in the United States. The representatives comprised Kwon and the chiefs of 13 securities firms as well as market information provider Koscom, Korea Securities Financial Corporation and Korea Capital Market Institute.

Under the New Portfolio Korea program, business delegates visited the headquarters of US companies including Amazon.com and Waymo, as well as investment advice platform provider Charles Schwab, investment management firm BlackRock and software developer Microsoft. The delegates also received legal advice about offshore investment from US law firm Morgan, Lewis & Bockius.

Based on lessons learned there, Kwon said it would be desirable to pursue efforts to create better regulations in Korea to buttress the growth of innovative businesses, as opposed to pursuing deregulation.

By Son Ji-hyoung
(consnow@heraldcorp.com)