SEJONG, July 9 (Korea Bizwire) – South Korea will invest nearly 10 trillion won (US$88 billion) over the next three years to help boost its exports, the government said Thursday.
The move comes as the country posted an on-year drop in its exports for six consecutive months since January.
In the first six months of the year, overall exports came to $269.01 billion, down 5 percent from the same period last year, while imports plunged 15.6 percent to $222.31 billion, according to the Ministry of Trade, Industry and Energy.
Under the latest measures, approved at a trade-investment promotion meeting chaired by President Park Geun-hye, the country will invest 6.5 trillion won by 2018 for research and development of 18 new, advanced products and related technologies that will serve as new growth engines.
The 18 products and technologies include the next-generation organic light-emitting diode panels and lithium-ion batteries.
In 2018, combined exports of the 18 new products and technologies will amount to $47.4 billion, the ministry said.
The new export-boosting measures follow what the government has called a set of short-term measures, announced in mid-April that largely sought to provide an immediate remedy for slowing exports by boosting shipments to China, the world’s single largest importer of South Korean goods.
The new mid- and long-term measures, announced Thursday, seek to permanently enhance the global competitiveness of South Korean goods instead.
To this end, the government will encourage local firms to increase their investment in new equipment and facilities.
Already, the country’s top companies are planning to invest a combined total of 91 trillion won before the end of next year, the ministry said.
“The latest measures are aimed at checking market conditions for our exports while improving the fundamental competitiveness of the country’s key industries,” it said.
The ministry apparently believes the cut in exports was largely caused by a downturn in global trade.
Park Il-jun, head of the ministry’s industrial policy bureau, said the country’s exports had moved up a notch to the world’s sixth-largest in the first half of the year, suggesting that the country may be doing better than others despite its 5 percent drop in exports.
The ministry has also maintained the drop in exports may be a temporary outcome of low global oil prices, which, in turn, pulled down market prices of petroleum and petrochemical products, key export items of South Korea that together accounted for 17 percent of the country’s overall exports in 2014.
In June alone, the country’s exports of petroleum products, such as gasoline and diesel, plunged 14.4 percent on-year while those of petrochemical products also dropped 12.8 percent, the ministry said earlier.