Minister Joo Hyung-hwan of the Ministry of Trade, Industry and Energy (MOTIE) delivers an inaugural speech at the government complex in Sejong City as he took office on Jan. 13.

A view of a ceremony in which MOTIE Minister Joo Hyung-hwan took office at the government complex in Sejong City on Jan. 13.

The government plans to provide a package of support, including marketing, financing and manpower, to turn more than 3,000 domestic demand-oriented companies into exporters this year. 

In his 2016 business report to President Park Geun-hye, Minister Joo Hyung-hwan of the Ministry of Trade, Industry and Energy (MOTIE) said, “We (at the MOTIE) will push for elevating the values of exports on top of quantitative growth in exports by innovating across the board such areas as exporting markets, items, exporters, methods and support systems.”

MOTIE plans to expand such support as manpower, marketing and financing in order to turn domestic demand companies into exporters. Some 3,000 experts, including youth and “power sellers” will be employed to take a close look into all processes prior to the signing of contracts. Domestic demand companies’ financial burden in participating in overseas exhibitions will be lowered from current 50 percent to 30 percent.

The government will supply 3.5 trillion win for SME policy funds and 2 trillion won in trade financing. Incentives will be given, depending on export outcomes. New loan borrowers will have interest cut by 0.5 percentage points when they export goods worth $100,000 or more and reach a 40 percent export ratio. 

In an effort to help large-sized companies enter foreign markets with SMEs, former’s online shopping networks for overseas buyers will be utilized. Trading companies exporting goods from SMEs will have trade insurance premiums reduced by 25 percent. 

The government plans to provide support to 1,000 SMEs to be on online networks for overseas buyers that are operated by logistics companies. They will receive preferential points in the shared growth index. The government will finance costs for producing content of products from SMEs. 

“These steps are designed to increase the number of SME and mid-size superstar exporters from 92,000 in 2015 to 95,000 this year and 100,000 next year,” the MOTIE said. 

The ministry plans to diversify exports to consumer products, services, technology and brands. It will set aside 4.8 trillion won in trade finance for exporting consumer products and services. The MOTIE will nurture such promising consumer products as cosmetics, fashion clothes, necessities/child items, agro-fishery products and medical items as new export engines. The ministry has a target of raising the portion of consumer exports from 5.3 percent in 2015 to 6-6.5 percent next year. 

By means of exporting, the ministry plans to make the most of e-commerce. The MOTIE will select 2,000 SMEs to join such global online shopping malls as Amazon and Taobao. It plans to secure new bonded warehouses in China and set up an online system for reporting exports via e-commerce. E-commerce export transactions are projected to surge to 1.5 trillion won this year. The accumulative e-commerce trade amounts added up to 788.5 billion won in the first nine months of last year. 

“Turing around exports will be the foremost policy task, and we’ll accelerate efforts to boost export from early this year to put the Korean exporting industry on a right track, thus contributing to rejuvenating of the national economy,” MOTIE Minister Joo said. 

MOTIE Minister Joo presides over a consultative meeting with heads of trade-related public entities, including KOTRA President Kim Jae-hong, K-sure President Kim Young-hak, KITA Executive Vice Chairman Kim Jung-kwan, aT President Kim Jae-soo, at the K-sure building in Seoul.

MOTIE to Relax Regulations to Nurture New Energy Industries

The MOTIE plans to shift the regulatory paradigm for promoting new energy industries combined with ICT from a positive system to a negative one. Under a negative regulatory regime, all business proprietors will be allowed to enter the new energy industries in principle with some exceptions. 

In a joint report to President Park with seven related ministries in Pangyo, Gyeonggi-do, the MOTIE announced this and other steps to strengthen the competiveness of industries by creating new growth engines. 

Individual “prosumers” and electric vehicle charging business owners will be allowed to produce and sell electricity. The ministry has decided to remove market entry barriers to new technology and new business proprietors. The ministry plans to allow prosumers to sell electricity they produce to their neighbors. They are now permitted to sell electricity only to KEPCO, but not to neighbors.

“The ministry will aggressively China, shifting to a focus on nurturing domestic demand, India maintaining a steady growth, India, being freed from trade sanctions, and the new markets Myanmar and Cuba,” MOTIE Minster said in a meeting with reporters on Jan. 14.

Korean manufacturing industries, which have focused on capital goods and intermediary exports, need to elevate consumer goods and services to quality ones to ramp up their competitive edge in the Chinese market, said Minister Joo, adding that Korea will have to turn to mid- and high-quality segments to have the upper hand over Chinese counterparts. 

In his inaugural speech, delivered when he took office on Jan. 13, Minister Joosaid, “All policy means, including R&D, manpower, marking, financing and taxes, will be revamped with a focus on nurturing exporters.”

Minister Joo said his ministry plans to shift the focus from advanced countries to China and emerging economies, including India and Vietnam, by making the most of already-completed Free Trade Agreements. The ministry plans to expand FTA signatories and aggressively cope with mega-FTAs as the Trans-Pacific-Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP), he said.