￦2 trillion committed to materials R&DThe government announced Friday that it will commit over two trillion won ($1.68 billion) annually from next year until 2024 specifically for the local development of industrial materials as part of broader efforts to reduce the country’s reliance off Japan.
The announcement ensures continued government spending in the sector for the next five years as Korea combats heightened supply uncertainties on industrial materials imported from Japan as an ongoing trade row between the two countries sees no immediate resolution.
According to the Ministry of Economy and Finance, the budget includes support for projects such as investment funds, cooperation with global companies and facilities operation and investment.
Finance Minister Hong Nam-ki stressed the importance of the government effort in the long run, while urging Japan to withdraw its export curbs.
“Japan’s export restrictions could pose as a risk to our economy in the short run, however, […] it presents an opportunity to strengthen the competitiveness of our materials, component and equipment industries,” said Hong at the Korea Chamber of Commerce and Industry. “We will make active fiscal investments of over two trillion won annually.”
“Japan needs to look back on the importance of the free trade order that it has emphasized and we again urge for the withdrawal of the export restriction measures against Korea.”
Hong’s remarks were in line with President Moon Jae-in, who backed the government’s plans for increased spending.
According to the Blue House spokesperson on Friday, Moon urged the government to prepare for more active fiscal spending next year to offset recent weakness in the private sector.
Moon hailed the government and industry’s efforts against Japan’s export restrictions, expressing hopes that the challenges posed by Tokyo’s measures serve to help expedite diversification and localization of industrial material supplies.
The president also requested during a meeting on Friday that Hong come up with measures to ease the 52-hour cap on weekly working hours.
Businesses have complained that the work-hour cap has limited productivity, especially considering the headwinds the economy has faced recently.
Hong said earlier in the day that the government is preparing a plan on the 52-hour workweek that will be announced sometime this month.
The weekly work-hour cap currently applies to companies with over 300 employees and will be implemented on companies with 50 to 299 employees from next year.
The government announcement of increased support for the materials industry comes as 99 days have passed since Japan implemented its first round of export curbs against Korea on three industrial materials - hydrogen fluoride, fluorinated polyimide and photoresists - essential in smartphone and display production.
The Finance Ministry reported that local industries have so far successfully diversified sources of the materials through overseas and domestic suppliers - hydrogen fluoride from companies in China and the United States and photoresists from a European company.
Domestic efforts have accelerated as companies are expanding production facilities for hydrogen fluoride and fluorinated polyimide and even other components affected by Korea’s removal from Japan’s trusted export partners such as silicon wafers.
The government has also ramped up pressure against Japan on the global stage as the two sides met in Geneva on Friday for bilateral consultations.
The talks serve as the first step in the World Trade Organization’s dispute settlement process.
BY CHAE YUN-HWAN [firstname.lastname@example.org]