BUSAN: South Korea is ready to be the global hub for advanced technology industry with strong support from international allies that it hopes will invest more in its economic growth and competitiveness capacity.
The country has also pledged to strengthen cooperation with its Asean partners for further trade and investment development, and is interested in investing in the automobile industry in Thailand’s Eastern Economic Corridor (EEC).
The potential of Asia’s fourth-largest economy was on display at the Investment Korea Summit 2023 held recently by the Korea Trade-Investment Promotion Agency (Kotra). The event drew hundreds of participants from the United States, Europe, China and Japan among others.
In addition to supporting foreign businesses in Korea, Kotra promotes the country’s investment environment and provides services such as consultations on topics ranging from investment application to setting up businesses.
Jang Young-jin, first vice-minister of the Ministry of Trade, Industry and Energy, said US-China competition is likely to lead to slower economic growth this year.
South Korea, he said, is trying to build an investor-friendly environment through bilateral free trade agreements with 20 countries, including tax benefits and other privileges. With those efforts, the country has enjoyed a leap in foreign direct investment (FDI) now worth over $23.9 billion, mainly in semiconductors.
“We have been seeking further international trade and investment, exploring new markets and enhancing the supply chain,” Mr Jang said.
He said Asean still has big potential to draw trade and investment as well, as reflected in the rapid growth in trade between Korea and countries in Southeast Asia.
Also, rising production costs in China and the enhanced competitiveness of Chinese companies have prompted Korea and other nations to shift their strategies, turning to the Asean region as a trade and investment hub.
A source from the ministry said Korea was keen on investing in the automobile industry in the EEC in Rayong province. “Korea is keen on developing advanced technology and believes the EEC has the potential for automobile industry investment,” he said.
The EEC Development Plan is part of the Thailand 4.0 scheme aiming to update and revitalise the Eastern Seaboard, the main engine of industrial production in Thailand for nearly 40 years.
The development plan will lead to significant development and transformation of the physical and social infrastructure in the three eastern provinces: Chachoengsao, Chon Buri and Rayong.
South Korea, meanwhile, will continue to spearhead innovation in high-tech industries together with partners from across the globe.
Based on FDI figures in 2022, 2.93% of investment went to advanced industries, 45.2% to materials, components and equipment, and 51.85% to other categories.
Greenfield investments account for US$17 billion of total FDI, and investments in future high-tech industries drew $7 billion. There were also 22 cases of increases in large-scale investments, the ministry said.
Presiding over the investment summit, Prime Minister Han Duck-soo said the government would do its best to promote investment, turning the country into a global hub for high-tech.
“We would like to create trust among investors that we will do the best to support them, including better regulations to help investors by eliminating unnecessary red tape,” said Mr Han.
“We will do more to encourage a stable supply chain. Importantly, we have the number one digital powerhouse in the world, making it possible to be the global hub for high-tech industry.”
Four foreign companies have proposed investments totalling more than $900 million in energy, future mobility, semiconductors and information and communication technology (ICT). One of them is Thailand-based B.Grimm Power, which is investing in wind energy, and the others come from Japan, the United States and Spain.