December 19, 2024

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Deputy Prime Minister and Finance Minister Choi Sang-mok convenes a governmental meeting at the Government Complex Seoul on Wednesday. (Yonhap)

The South Korean government pledged to implement a set of measures to stimulate corporate investment despite the recent political disruption sparked by President Yoon Suk Yeol's short-lived martial law declaration.

“With the escalated uncertainties surrounding the economy, a sense of crisis has been growing,” Deputy Prime Minister and Finance Minister Choi Sang-mok said at a governmental meeting held at the Government Complex Seoul on Wednesday, joined by other economy-related ministers.

"Businesses have to develop advanced technologies and be equipped with the infrastructure for sufficient production to survive global competition. But businesses could curtail their investment plans, impacted by domestic politics," he said.

“The government will ensure businesses can proceed with their investment plans smoothly.”

Under the plan, the government will prioritize the approval of an envisioned semiconductor cluster in Yongin, Gyeonggi Province, in an effort to encourage the semiconductor industry, on which the country depends heavily.

The government will accelerate the schedule for approving the Yongin chip cluster to before the year's end instead of in the first quarter of next year, by streamlining the administrative process.

More than 16 leading chipmakers, such as Samsung Electronics, SK hynix and ASML, are expected to operate semiconductor production facilities in the cluster, which is set to be completed by 2047. Some 2.4 trillion won in public funds has been allocated to build the complex.

In addition to moving up the dates for the Yongin chip cluster, the government will also provide various forms of incentives to enable seven large-scale projects worth a combined 9.3 trillion won to break ground next year.

The projects include an artificial intelligence cluster hub in Gwangju, Gyeonggi Province, and the reconstruction of an inland port at Incheon, a major gateway for freight here, and the construction of a secondary battery cluster in Saemangeum, North Jeolla Province. Leading secondary battery players such as LG Chem and LS are to build production facilities in the area.

Additionally, tax incentives will be expanded for the liquefied natural gas industry, aiming to invite more companies to invest in an LNG hub terminal to be built in Yeosu, South Jeolla Province. The authorities plan to develop the Yeosu terminal into a hub for the LNG industry in the Northeast Asia region.

“In the end, we can only break through the internal and external challenges with corporate investment,” Choi said.

Following the martial law fiasco, the government has been striving to reassure businesses and investors that the impact of the ongoing political turmoil on the economy is limited. Choi has held a series of meetings in the past two weeks with his overseas counterparts, high-ranking officials and global investors to boost the economy.

By Im Eun-byel (silverstar@heraldcorp.com)