South Korea eyes manufacturing boost via greater market access, R&D funding

SEOUL (Reuters) - South Korea’s trade ministry announced on Monday a plan to strengthen its manufacturing sector by expanding market entry into countries such as China and Russia, and boost funding for technologies including artificial intelligence and autonomous driving.

Two large container ships and a tanker can be seen under construction in a ship yard close to Busan, South Korea October 25, 2017. REUTERS/Henning Gloystein/Files

As the first detailed industrial policy plan announced since President Moon Jae-in was elected in May, the roadmap seeks to address weaknesses in Asia’s fourth-largest economy.

The trade ministry plans to help fund research & development with a 144.5 billion won ($132.82 million) budget over five years for key autonomous driving technologies and additional budgets for other technologies, and ease regulations.

The ministry will encourage private investment by creating a 300 billion won fund by 2018, partly backed by the government as it tries to bolster the competitive edge of its manufacturers.

China and other emerging economies are making rapid inroads in key industries that export-driven South Korea has excelled in, including in semiconductors and display panels.

The trade ministry said it will expand market entry in China, Russia, central Asia and southeast Asian countries, targeting industries such as petrochemicals, infrastructure, tech, healthcare, auto, energy, components and steel.

The ministry said its plans were driven by a strategy to respond to the growing risk of global trade protectionism, but the statement didn’t elaborate.

In order to support future growth industries, the government aims to have self-driving cars on highways by 2020 with 350,000 electric cars on the road by 2022.

The government will also throw its weight behind artificial intelligence and the use of data in connecting appliances and providing healthcare, and support a diversification plan for energy sources.

($1 = 1,090.5000 won)

($1 = 1,087.9100 won)

Reporting by Joyce Lee; Editing by Shri Navaratnam