By Ju-min Park
SEOUL (Reuters) - For 61-year old construction worker Chae Chang-geun, an ethnic Korean from China, Seoul is a place to make money but not a place to call home.
Chae is one of the 450,000 people from the Korean diaspora born in China, who make up 40 percent of the immigrant workforce in South Korea helping to keep the country's car plants, shipyards and building companies going.
With one of the fastest ageing populations among developed nations, South Korea will become increasingly dependent on foreign labor. But the problem is that this ethnically homogenous country of 50 million can barely bring itself to welcome its own kin, let alone "foreign" labor.
"Technically, this country is our motherland," said Chae, who like other ethnic Koreans from China, thought he would be welcomed in South Korea because of a shared cultural history.
Instead, many of these immigrants say they are treated coldly, picked on by local Koreans for their accents and treated with distrust and disdain.
"We feel like we are a minority in both China and South Korea," Chae said.
South Korea has had a remarkable rise from the devastation of the Korean war six decades ago to now stand as the world's 15th biggest economy, home to globally recognized brands such as mobile-phone-to-chipmaker Samsung and automaker Hyundai.
But the population is the fastest ageing of the industrialized countries grouped in the Organization of Economic Co-operation and Development. Immigration will almost certainly be needed to keep the economy growing as the ratio of senior citizens to working age people - now 1 to 5.6 - is projected to shift dramatically to 1 to 1.2 in the next 50 years.
"The Republic of Korea should be using immigration as part of a multi-pronged strategy to deal with its changing demographics and ageing issues," said Dr. Amlan Roy, managing director and researcher for global demographics and pensions research at Credit Suisse in London. The Republic of Korea is the official name of South Korea.
The risk is that without immigration the population will continue to shrink and fail to provide enough taxpayers to fund a social welfare burden that is set to grow as the country ages. Fewer workers could push up hiring costs, prompting firms to move production offshore to remain globally competitive, effectively hollowing out the economy.
But first, South Korea has to become more accepting of immigration and the experience of Korean Chinese - the biggest immigrant group in the country - suggests that may take some time, said Lim Dae-geun, a professor of Chinese studies at Hankook University of Foreign Studies in Seoul.
"They are the same Koreans but their nationality is Chinese. And they are the bottom class of South Korea's economy," Lim said.
"They are treated as needy people that have jobs that are physically tough and low paying. That turns South Koreans' view of the group more discriminatory," Lim said. "The country is not ready to fully open itself to immigrants."
A broad assumption is that the Korean Chinese are taking jobs away from local Koreans, although more than 84 percent of companies surveyed in 2012 by the Korea Chamber of Commerce and Industry said that was not the case.
Half the firms said they wanted to hire more foreign labor but were restricted by government-set quotas. Migrants make up just 9 percent of total manufacturing workers, much less than for example Singapore, where they make up 39 percent.
The justice ministry, which handles visas for foreigners, said it had "concerns" over cheap Chinese labor taking over Korean jobs. Visa rules are more restrictive on Korean Chinese than other overseas Koreans, such as those from the United States.
The labor ministry said it had similar concerns: "Too much migrant workforce could hamper work conditions and deprive opportunities for underprivileged South Koreans," said Jang Hyun-suk, senior deputy director at the ministry's foreign workforce division.
The term given to Korean Chinese - joseonjok - describes the descendants of Koreans who fled to China in the late 1800s and early 1900s in the face of famine and Japanese occupation.
Advocacy groups say the name is associated with negative connotations in the media, such as by highlighting crimes committed by these immigrants although their crime rate is less than the national average.
Baek Chung-kang, the son of Korean Chinese parents, felt the full force of negative social media. He achieved a dream of many young Koreans by winning a TV contest that launched him as a pop singer. But after being diagnosed with cancer, he was attacked online.
"We have no sympathy with joseonjok," read one commentary about his illness. "You should thank South Korea because you would be dead by now if you were in China," another said.
"We had difficulties in the beginning but decided to ignore it," said Baek's father, Baek Myung-duk, who used to work at a Hyundai subcontractor making car seats. "Although my son was born in China, he inclined to Korea because the home of his ancestors is Korea, regardless of singing."
An arson attack that razed a shelter in Seoul used by immigrants epitomized for many of the Korean Chinese workers the isolation they feel. The attack destroyed the four storey building housing the shelter and a medical centre that offered free care.
"Although now we face a difficult path, we will work together and win," said shelter resident Lee Kwon-hwa, who works as a maid and part-time waitress, as she rested at a makeshift camp following the fire.
As he looked at the ruins, construction worker Chae seemed more downbeat.
"Life is not beautiful here," he said.
(Reporting by Ju-min Park; Editing by David Chance and Neil Fullick)