The head of a major business lobby group in South Korea called on the government Monday to reduce its intervention in the market, saying the government should focus its regulatory reform only on areas that "the market cannot resolve by itself."

Kim In-ho, chairman of the Korea International Trade Association (KITA), added that salaries should be left to the market as well, emphasizing that the issue has been approached from the "social and political" perspective, not from an economic one.

"The core of regulatory reform is to return to the market," Kim told reporters during a press conference marking one month since his inauguration. "The key is to bring the government policies that have not been in line with market principles back to market principles."

"The government needs to set its appropriate market role, leaving things that can be done by the market to the market. Only when the market cannot resolve itself should the government think about intervention," he said.

He noted that a state-managed economy would not be the right recipe for success these days, adding that most prosperous countries in the world are now pushing for a so-called "entrepreneurial economy," where the government's intervention remains at a minimum level.

"A baby should be taken care of by parents but as it grows up, more autonomy should be granted. As such, the government should reduce or adjust its role in the market as the economy grows bigger," he said. "The market has matured enough for it."

He cited the medical, education and welfare sectors as areas where the government has to reduce regulation and seek market opening. In particular, he said that more service providers and more options available to consumers would be key in tackling many problems.

When asked if he supports other business lobby groups in their opposition to salary hikes as demanded by the government to boost the economy, he evaded providing direct answers but noted that determining salaries should also be left to market forces.

"Why do we have these intractable problems with salaries and relations between labor and management here? It's because those issues have not be approached from an economic perspective," he said. "During the early phase of economic development, they were not dealt with from an economic perspective, but from a social and political one."

"We need to return to the basics. We have no choice but to return to the market. The labor issue also should be left to supply and demand and wages should be regarded as a price determined in that process," he added.

As for the argument that the country should place more emphasis on boosting domestic demand than exports in a way to tackle the economy's "imbalance," in which it depends heavily on overseas shipments, he said the major source for growth should be found from the outside through supporting government efforts to lower trade barriers through free trade deals.

He saw the recently concluded free trade deal with China as a "breakthrough" for the business community and urged the government to make more active efforts to expand free trade pacts through such deals as the Trans-Pacific Partnership, a U.S.-led regional free trade agreement.

  "For an economy which has managed to succeed like us, it is advantageous to open the market whenever it is possible. The market that will be opened to us is larger than the one that will be opened to outside," he said. (Yonhap)