The Ministry of Trade, Industry and Energy said Monday, “This year, six financial institutions will provide a total of 235 trillion won, up 15.3 trillion won from last year, to back exporters through trade finance,” in a joint plan with other ministries, including the Finance Ministry, the SMEs ministry and the Financial Services Commission.
The six state-run financial organizations are the Export-Import Bank of Korea, Korea Trade Insurance Corporation, Korea Credit Guarantee Fund, Korea Technology Finance Corporation, Small & Medium Business Corporation and Korea Development Bank.
The latest government plan comes amid growing uncertainties over global trade, including the US-China trade dispute, Brexit and a slowdown in the global economy, as well as weak demand for traditional export drivers, including microchips, petrochemicals and petroleum products.
|The Minister of Trade, Industry and Energy, Sung Yun-mo.(Yonhap)|
The budget targets some 42,000 small and medium-sized exporters to help them through overseas exhibitions, global partnerships, overseas offices, trade delegation and export consulting.
Among the budget, 35.7 trillion won will be used for eight trade finance programs ranging from contract, manufacturing, shipment and payment. A total of 352.8 billion won will be used for export marketing.
The industries to be backed will be diversified into chips, bio health, future cars, drones and the internet of things, from the current automobiles and shipbuilding sectors. Global partner innovation centers will be set up in the cities of Detroit in Michigan, Frankfurt in Germany, Nagoya in Japan and Shanghai, China.
The government will gradually map out plans to foster new industries, including bio health, secondary batteries, content, living consumer goods, plants and overseas construction, to diversify export portfolios in the long term.
As part of diversifying efforts, it plans to set up global test certification centers for bio and health, create funds for next-generation batteries, run global infrastructure funds, expand culture content funds and hold exhibitions to link Hallyu with industries.
“This trade measure has focused on strengthening trade finance and export marketing, which we found exporters need the most. We will continue to support them for the goal of reaching $600 billion in exports for two straight years,” said the Minister of Trade, Industry and Energy, Sung Yun-mo.
Data released by the Korea Customs Service on Monday signals a slowdown of chip exports, the nation’s key export drivers.
The export portion of chips fell to a record low of 16 percent in January, the lowest in 19 months. The volume stood at some $7.4 billion, down 23.3 percent year-on-year.
The portion has gradually fell from 24.5 percent in September, 21.1 percent in October, 20.7 percent in November and 18.3 percent in December, driven by a slowdown in the global chip market growth and falling chip prices.
The export prices of integrated circuits, including DRAM, NAND flash and nonmemory chips fell 22.2 percent in January on-year, according to the Bank of Korea.
By Shin Ji-hye(email@example.com)