S. Korea lays out comprehensive plan to boost exports

[Photo by Yonhap]

To break away from eleven consecutive months of declining exports, lasting from October 2022 to August 2023, the South Korean government has introduced an all-encompassing support strategy that aims to diversify export items and markets as well as strengthen the existing infrastructure.

The government forecasts the nation will maintain its trade surplus throughout the second half of the year, as outbound shipments of semiconductors and other IT items, as well as ship exports, gradually improve amid strong automobile and secondary battery exports.

Against this backdrop, the strategy’s focus is not only on enhancing the competitiveness of traditional export industries but also on bolstering export momentum in promising areas like digital technology, content, and nuclear energy.

In addition to targeting existing key markets like the United States, China, and ASEAN countries, the government plans to support South Korean companies in winning contracts in new strategic markets including the Middle East, Latin America, and the European Union. The comprehensive plan includes various forms of support, including trade and export financing, totaling up to 181.4 trillion won ($138 billion) by the end of 2023.

The government specifically intends to expedite the completion of a national semiconductor industrial complex in the city of Yongin, which houses advanced semiconductor manufacturing facilities, by exempting it from preliminary feasibility studies conducted by public agencies, the first such exemption in the seven national advanced strategic industry specialized zones. The government will also enhance the semiconductor ecosystem via workforce development programs and the establishment of a 300 billion won “semiconductor industry ecosystem fund” to boost financial support for small and medium-sized enterprises in the semiconductor sector.

For the secondary battery industry, the government will implement fast-track preliminary feasibility studies for next-generation battery research and development (R&D) projects worth 200 billion won by November 2023. It will also launch new R&D initiatives to develop lithium iron phosphate (LFP) and sodium batteries, which are affordable and have longer lifespans. An allocation of 26 billion from next year’s budget will be dedicated to the development of core materials and cell manufacturing technology for sodium secondary batteries.

In the automotive industry, the government aims to expand exports of Korean-made electric vehicles to emerging markets. For example, it seeks to sign an MOU for e-mobility cooperation with Indonesia this month to ensure proactive access to the rapidly growing EV markets as Jakarta hosts the ASEAN summit.

In addition to boosting key item exports, the government hopes to gain momentum in other promising sectors. In response to the high demand for digital transformation in the U.S. and the Middle East, the government will deploy a joint public-private sector task force to explore new markets, including the Middle East and India, and expand support for K-content creators. To enhance the global competitiveness of large-scale content and local video platforms, the government plans to create a 1 trillion won “K-content strategy fund.”

In nuclear power exports, the South Korean government will financially support and customize sales activities for countries that are very likely to introduce new nuclear power plants, such as the Czech Republic and Poland.

Ukraine with its potential reconstruction projects and Poland as a gateway to Europe are viewed as core elements of future strategic markets for South Korea.

The Korean government plans to engage in a trilateral cooperation mechanism with Korea, Poland, and Ukraine to involve South Korean firms in Ukraine’s reconstruction efforts. A deputy ministerial-level consultative body between Korea and Poland will be formed in September to identify cooperation areas for reconstruction.

To alleviate the financial constraints faced by export companies, the government will also provide up to 181.4 trillion in trade and export financing by the end of this year via a public-private partnership.