Gov’t focuses on overseas projects in 2016 policies

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Gov’t focuses on overseas projects in 2016 policies

The government will push the establishment of industrial complexes in countries like China and Vietnam to help the Korean small and midsize exporters operating production lines and offices there, according to the government’s economic policy package unveiled on Wednesday.

The Korea Land and Housing Corporation will be in charge of arranging cooperation with the partner countries, and the complete plan is slated to be prepared by June, including financing and operation strategies.

The package’s other focus is on resetting Korea’s export strategy, considering changes in the global value chain, and fostering next-generation industries that will eventually become the drivers of the Korean economy in the coming decades.

“We’ll be introducing readjusted industrial support strategies, considering changes to the industrial structure among Korea, China and Japan,” Finance Minister Choi Kyung-hwan said at a press conference on Wednesday.

The government also plans to open business assistance centers in major trade and business hub cities like New York City, Beijing and Ho Chi Minh City, which will help out Korean companies’ overseas offices with legal, accounting and labor issues.

In Shanghai and California’s Silicon Valley, a new state-run start-up complex will open to support aspiring Korean technology specialists as they actually create their own companies.

At home, the government will spend more to foster some 19 future technologies, ranging from driverless cars and high-speed drones to energy management systems.

It has already been offering tax deductions for companies’ spending on R&D in these 19 areas through 2021 and has financed companies’ efforts via low-rate loans or research grants. Next year, the list of technologies will be reviewed again to reallocate resources to areas that need urgent advancement.

Overall, the government will allocate an extra 2 trillion won ($1.7 billion) in next year’s budget for R&D, on top of the 50 trillion won already designated.

To encourage mergers and acquisitions (M&As) among small and midsize companies, the government said it will expand tax benefits for the M&A participants in the technology and pharmaceutical industries.

The government will also urge the private sector to expedite investments next year by granting new business licenses.

It will pick the nation’s fourth telecom carrier in January, and hold an open bid for a new frequency bandwidth in April that will enable telecom carriers to create 5G wireless networks and offer ultra high-definition video services.

The government estimates the local telecom industry will spend at least 2.5 trillion won next year.

Several private-sector groups, including the Korea Chamber of Commerce & Industry and Korea International Trade Association, responded positively to the announcement.


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