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Hither and Yon

Chung Mong-Joon Wants To Lead the City of Seoul Out of Its Funk, Forbes Staff, Contributor

By Donald Kirk

Chung Mong-Joon owns the biggest chunk of shares in the world’s biggest shipbuilder, Hyundai Heavy Industries , but he gave up any role in the company years ago. Instead his passion is politics. He’s been far more interested in selling South Korea as a global power than in selling ships and offshore oil rigs. A member of the National Assembly, he’s now running for mayor of Seoul and envisions the city as a regional hub competitive with Shanghai, Tokyo and Hong Kong. “My vision is to make Seoul the center of East Asia in terms of economy, culture and tourism,” says Chung in his campaign office in Yeouido, the main financial district.
Chung looks with alarm at statistics showing that Seoul’s population fell below 10 million this year for the first time since the 1988 Seoul Olympics. “A survey shows one-third of Seoul citizens don’t want to live in Seoul,” he says, poring over a paper at his desk. “That means people live in Seoul because of jobs, not because they want to live here. I want to make Seoul more attractive. I want to make it a good investment.”

He’s campaigning hard to win the nomination of the conservative Saenuri party on May 12 and then the June 4 election. The Saenuri propelled Park Geun-Hye to the presidency in 2012, but in Seoul Chung faces an uphill struggle. The incumbent mayor, Park Won-Soon, defeated a candidate supported by the Saenuri, then known as the Grand National Party, in a 2011 special election. He was once jailed as a firebrand student protester against the president’s dictatorial father, Park Chung-Hee, who was president for 18 years until his assassination in 1979. The mayor seeks reelection to a full four-year term as a leader of the left-leaning New Politics Alliance for Democracy. He has the impassioned support of activists always resentful of the power of the chaebol.
Chung, 62, speaks from quite the opposite background. Drawing from his years at HHI, culminating in the chairman’s post, he berates Park Won-Soon for economic errors that he believes contribute to a widespread malaise among voters. At the top of the list is the refusal of the metropolitan government to turn over unused land for development.
For foreign visitors, perhaps his most intriguing notion is to make Seoul a destination for international cruise traffic—not huge ships but 4,000-to-5,000-tonners for bringing in some of the hordes that visit from China every year. Chung makes the argument simply: “Last year 4 million Chinese visited South Korea. One million came by ship”—most of them landing at the industrial port of Incheon, 20 miles southwest of Seoul but often two hours away through traffic or via the subway system. A canal already links Incheon to the Han River, which runs through the capital, but it’s inadequate for passenger vessels. “For $30 million we can make docking facilities,” he says. “I don’t think we need more dredging.” Incheon, he says, would still be the commercial port for the region.
Chung denies that his dream of Seoul’s emergence as a port for international and coastal passenger traffic reflects his time at HHI, now South Korea’s seventh-largest chaebol. Rather, he says, he developed the instincts needed to govern a complicated metropolis. “My experience as head of the company surely helps me,” he says. “I worked in a company which exports 90% of its products.”
Chung’s 10.15% stake in HHI (he controls another 3.18% held by two foundations that he started and chairs) has long made him the country’s richest politician. This year he ranks 11th among South Korea’s wealthiest people, with a $1.75 billion fortune. He’s the sixth son of Chung Ju-Yung, the late founder of the Hyundai empire, who divided it up among his six surviving sons. (Eldest brother Chung Mong-Koo chairs Hyundai Motor.) Mong-Joon’s father selected him for HHI as a tribute to his intellectual acumen. He was the only family member to go to the elite Seoul National University, and he went on to the Massachusetts Institute of Technology’s Sloan School of Management for his M.B.A., then to Johns Hopkins for a doctorate in international relations.
Often addressed formally as “Dr. Chung,” he likes to be called M.J. Either way, his privileged background can be a liability. That was evident when his 19-year-old son, in a Facebook post, described as “uncivilized” the anguished reactions of relatives of the 300 passengers, most of them high school students, trapped on the ferry that sank off the Korean coast last month. Bowing low, Chung had to apologize “for my son’s childish behavior.” He is banned by law, as a candidate and an officeholder, from contributing to the rescue or to the families, but HHI sent volunteers and much-needed gear, including a floating dock for holding the ship after it’s hauled out of the water.
For Chung politics has been a way of life since 1988, when he won the first of his now seven terms in the National Assembly running as an independent from the southeastern port city of Ulsan, the site of HHI’s sprawling shipyard. His famous father then got the politics bug, running for president in 1992. The younger Chung assisted in the bruising campaign against two populist figures, Kim Young-Sam, who won easily, and Kim Dae-Jung, elected five years later. The elder Chung, despite his belief that his business success would have broad appeal, ran far behind.
Chung Mong-Joon also shared his father’s enthusiasm for sports. Just as the father had battled to bring the Olympics to Seoul, the son—as president of the Korea Football Association—persuaded the Fédération Internationale de Football Association, or FIFA, to accept South Korea’s bid to cohost the 2002 World Cup with Japan.
As an aspirant for high office Chung sometimes displays uncertainty. Building on his World Cup success, he formed his own party in a short-lived run for the presidency that year but dropped out and endorsed the liberal Roh Moo-Hyun. One day before the election he withdrew his support for Roh in disagreement over his leftist positions. Unscathed, Roh easily defeated the conservative candidate. Chung now declares that his highest ambition is to serve a full term as mayor and not compete in the next presidential election in 2017.
Chung has “64 promises” to appeal to a restive populace worried about a stagnating local economy. One, he says, “is to make the northern part of Seoul [north of the Han River] as prosperous as the southern”—the glitzy Gangnam district dominated by sparkling office towers, broad avenues and fashionable shops. “I want to create a new enterprise zone in the northern part to provide incentive to companies,” he says. He would offer tax breaks to lure investors and, at the same time, revive a high-tech complex that’s “not as bright as it should be.”
Chung’s commitment to public life outside HHI is total. For the past 12 years he has not held a formal position at HHI. The group now has 26 companies, all contributing to Chung’s wealth while he assiduously stays away.

Acquisitions in recent years include Hyundai Samho, the shipyard across the peninsula at Mokpo, owned by one of Chung Ju-Yung’s brothers before HHI saved it from bankruptcy; Hyundai Oilbank, a refining company and gasoline retailer; Hyundai Corp., the historic trading company founded by Ju-Yung; and Hi Investment & Securities, a foray into high finance. Though Mong-Joon’s older son works for HHI, he says “I pay for my [own] coffee” at the Hyundai Hotel opposite the main gate in Ulsan.
But why did Chung plunge full-time into the messy world of politics when he could have stayed on at HHI? He was inspired by former New York mayor Michael Bloomberg. He served on the board of Johns Hopkins while Bloomberg was chairman, and once Henry Kissinger had them over to his apartment in New York. “We talked not only about the mayor’s experience,” he says. “We talked about the global economy.”
Chung places Seoul in the context of South Korea and the world. The city’s per capita gross domestic product, he says, ranks fifth among the country’s 17 provinces and independent cities. He worries about a “misery index” compiled at Seoul National University that shows Incheon has the highest and Seoul the second-highest level of misery. Armed with graphics, he talks lucidly at briefings before small groups.
To win, Chung must project himself as a man of the people. That’s not easy: He’s no spellbinding orator. But he betrays no doubt about his mission. “I want to make Seoul the front line of the new South Korea,” he says. “Seoul is sleeping, and I want to wake it up.”
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