Poland’s blooming relationship with South Korea

According to South Korea’s president, Poland is a gateway for Korean companies to enter Europe and a strategic logistics hub. ‘It is our most important cooperation partner in Central and Eastern Europe.’ 

Poland’s relationship with South Korea is blossoming. Ahead of a visit to Warsaw last week by the South Korean president, Yoon Suk Yeol, national airline LOT announced plans to start a weekly, direct flight from Wrocław to Seoul in November, complementing its four direct flights per week to the Korean capital from Warsaw. 

Launch of the route is not as random or surprising as it first appears. Wrocław is home to Korean-owned LG Energy Solution Wrocław, Europe’s largest producer of lithium-ion batteries for electric vehicles, employing almost 10,000 people. It is one of many strategic South Korean investments in Poland, which also includes a Hyundai polypropylene plant in Szczecin, where production began in June. 

Poland’s privately-owned energy firm ZE PAK, which currently produces energy at four plants mainly from coal, and state-owned energy giant PGE, last year joined forces with Korea Hydro and Nuclear Power (KHNP) to assess the viability of building four 1,400-megawatt nuclear reactors in Pątnów, using South Korean technology 

Seoul’s Incheon Airport – where those flights from Wrocław will land – is an advisor to Poland’s Solidarity Hub, or CPK, an integrated air, rail and road transport hub the Warsaw government wants to build in the centre of the country. In addition to being the largest airport in Central and Eastern Europe, CPK is also intended to deliver roughly 2,000 kilometres of new, largely high-speed railway lines linking Warsaw to Poland’s regions and beyond. 

Poland’s largest foreign investor 

According to Polish President Andrzej Duda, there are in all approximately 550 companies with Korean capital registered in the country, half of which are located in Lower Silesia. In 2021, South Korea was by far the largest foreign investor in Poland, pumping in 1.9 billion US dollars, well ahead of the United States (364 million US dollars) and Germany (155 million US dollars). 

Speaking at the opening of a South Korea-Poland Business Forum on July 14, Duda said that he “attaches great importance to cooperation with the Republic of Korea.”  

Seoul appears to be just as keen on a relationship that is proving to be increasingly lucrative.  

“Poland is a gateway for Korean companies to enter Europe and a strategic logistics hub,” said Yoon. “It is Korea’s most important cooperation partner in Central and Eastern Europe.” 

“Strengthening cooperation between [our] two countries will not only have economic benefits, but also strengthen defence capabilities and contribute to economic security and the stabilisation of supply chains in both countries,” he added. 

Last year, the two countries signed an arms deal worth 13.7 billion US dollars – South Korea’s largest ever arms deal – which includes the supply of Chunmoo rocket launchers, K2 tanks, K9 self-propelled howitzers, and FA-50 fighter aircraft. In Warsaw last week the presidents of the two countries agreed to increase the value of the deal, with Duda expressing an interest in Poland becoming a site for the manufacture of Korean arms. 

The two countries also reportedly signed 33 memorandums of understanding in areas including further nuclear power plant cooperation, high-tech industries and the postwar reconstruction of Ukraine. 

South Korea also views Poland as a gateway to Ukraine, with President Yool saying last week, “Poland is Ukraine’s closest neighbour and will play an important role in postwar recovery projects.”

“Korea has a lot of experience in participating in postwar reconstruction projects,” he added.   

Learning from the Asian tigers 

Last week, a report from the Vienna Institute for International Economic Studies (wiiw) suggested that Poland and other countries in Central and Eastern Europe should learn from South Korea and other Asian tiger economies in how to move away from the “extended-workbench” model towards a new, innovation-based economic model. 

“Only then will these states be able to catch up with Western Europe in terms of productivity and living standards,” says Zuzana Zavarská, an economist at wiiw and co-author of the report. 

“Taiwan and South Korea have shown how effective a well-designed strategic industrial policy can be. Even though there are many differences with the EU members of Central and Eastern Europe the success stories of East Asia offer valuable inspiration.”

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