The Mogul Who Is Seoul’s Unofficial Diplomat : Trade: Hyundai’s leader believes in joint Northeast Asian development. He helped persuade the Soviets to establish ties with South Korea.

To Chung Ju Yung, founder of the massive Hyundai group, the Soviet Union’s recent diplomatic recognition of South Korea was a simple matter.

“We needed each other economically,” he said in an interview. “If there is an economic need, politics will follow.”

Chung, 74, South Korean business’s self-appointed ambassador to the Soviet Union, did more than any other executive to persuade Moscow to establish ties with Seoul, archenemy of Moscow ally North Korea.

Now he is pioneering a new form of economic cooperation: trilateral projects involving China, the Soviet Union and South Korea.

Eventually, he suggested, such projects could include North Korea as well.

Hyundai has put up $30 million to start a joint Soviet-South Korean forestry operation at Svetlaya, north of Vladivostok, that will employ 500 Chinese and 500 Chinese of Korean ancestry by next spring, he said. Three hundred of the workers from China are already on the job, he added.

Exports of timber to South Korea, which are expected to amount to around $100 million a year when the project is fully developed, will start as early as next January, he said.

How multinational cooperation in Northeast Asian development progresses, Chung said, “will largely depend on how China’s policy changes.”

“I don’t know how many (multinational) projects will emerge, but there certainly will be some projects forthcoming,” he predicted. “Eventually, North Korea will join.”

On his first trip to Beijing last month to attend the Asian Games, Chung said, he found “Chinese authorities very enthusiastic about sending their workers” to such projects as the Svetlaya forestry undertaking.

He also disclosed that Chinese authorities had urged Hyundai to join in the bidding for offshore oil and gas drilling in Pohai Bay, the first such offer reported to have been made to a South Korean businessman. Chung told the Chinese that he would consider the offer.

“Before, Chinese officials were reluctant to meet (South) Korean officials and businessmen,” he said. “But this time we had no trouble meeting Chinese officials in charge of economic affairs.”

He said he met both China’s construction minister and the president of the state corporation in charge of petroleum development.

Chung indicated that he was not interested in Japanese participation in multinational Northeast Asian projects, an idea that has gained some support among Japanese businessmen.

“Japanese have their own vested interests in China and are focusing on commodity sales to the Soviet Union,” he said.

Chung is now “honorary chairman” of the $32-billion Hyundai empire of firms that manufacture everything from automobiles and ships to semiconductors and has made an international imprint in the construction business.

Last week, South Korea’s prime minister, Kang Young Hoon, made the first-ever trip by a head of the South Korean Cabinet to North Korea’s capital of Pyongyang for talks with his Communist counterpart.

The visit, made to reciprocate North Korean Prime Minister Yon Hyong Muk’s September trip to Seoul, came in the wake of Pyongyang’s decision to seek diplomatic ties with Japan and the announcement of the Seoul-Moscow diplomatic ties.

Still, Chung said, he sees little prospect of change in North Korea in the next year. “Change in North Korea will probably be more gradual,” he said.

But he made it clear that promoting change in North Korea, where he was born, has been the prime goal of his six trips to the Soviet Union and the nine development projects he has promised to consider with the nation that has been North Korea’s chief supplier of weapons since before the 1950-53 Korean war.

“I have always been interested in normalization of North-South Korea relations,” he said. “I thought the Soviet Union could be a significant factor in making that happen (and that) it would be the key to making South Korea be not in conflict with the North.”

Ultimately, a reunified Korea “would be a self-sufficient economy,” he said. “We would no longer need exports to grow.”

Twenty years or so after reunification, a single Korea would be a giant on the world scene, he predicted.

If the North and South were reunified within two or three years, “the per-capita gross national product would be very comparable to Japan’s” by the year 2010, he said. That would translate into a GNP half the size of Japan’s by 2010.

North and South Korea have a combined population of about 60 million, compared to Japan’s 120 million.

Chung said he will make his seventh trip to the Soviet Union next month in an attempt to firm up a list of eight other possible joint ventures that Hyundai is considering. Among them are ship repair facilities, coal mining and natural gas development and a factory to build personal computers.

He said he expects about half the targeted projects to come to fruition after feasibility studies are conducted.

In terms of the investment that the South Korean conglomerate would make, the projects would range in value from tens of millions to hundreds of millions of dollars, he said.