November 27, 2024

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Finance Minister Choo Kyung-ho speaks at a governmental meeting held in central Seoul on Wednesday. (Yonhap)

The South Korean government is seeking to push the growth of cutting-edge display technologies, providing aggressive support such as hefty tax cuts and deregulation.

“Displays will be designated as a national advanced strategic technology to encourage private investments, ensuring a stable supply network while supporting policy financing, research and development, and training,” Finance Minister Choo Kyung-ho said at a governmental meeting held in central Seoul on Wednesday.

He added the Ministry of Trade, Industry and Energy will announce detailed measures to support the local display industry this week.

“Though we maintained the No. 1 spot in the global display market share from 2004 to 2020, the competition has intensified, especially in OLED technology, as latecomers, including China, are catching up.”

As Choo indicated, China surpassed South Korea’s global market share in displays in 2021, according to the Korea Display Industry Association.

A report by the association showed China took up 42.5 percent of the global display market share, followed by South Korea at 36.9 percent and Taiwan at 18.2 percent in 2022.

As South Korea is heavily dependent on exports, the government has been focusing on boosting the local tech industry to overcome slow exports amid the economic slump.

In March, the National Assembly passed a revision bill, dubbed the Korean version of CHIPS and Science Act, lowering corporate taxes for facility investment in strategic industries including display and chips, nearly doubling previous tax cuts.

Additionally, Choo mentioned the government will support small and medium-size enterprises that are facing challenges in exports. Although Korea's exports were expected to recover after China's reopening, they are yet to bounce back due to weak demand from China.

According to the Ministry of SMEs and Startups, exports of small and medium-size enterprises fell 7.9 percent on-year in the first quarter of 2023.

“We will work out customized measures centering on financing and infrastructure support,” Choo said.

The government plans to support SMEs that have been performing well in exports despite the weak economy, easing regulations on policy funds offered by the Korea SMEs Startups Agency until next year for companies with actual export records over $300,000 in the past year.

The SMEs Ministry will offer loans with discounted interest rates for enterprises with actual export records over $100,000.

Choo highlighted the importance of seafood exports as well.

"We will strengthen support for the expansion of blue food exports, meaning marine food resources,” Choo said.

At the meeting, the Ministry of Oceans and Fisheries announced the goal of making seafood exports hit $4.5 billion by 2027, up roughly 50 percent from the record-high figure of $3.15 billion in 2022. It was the first time for South Korea's seafood exports to surpass the $3 billion mark.

The ministry will support the exports of core seafood products such as gim (dried laver pressed into a dark green sheet) and tuna, which already surpass $600 million in exports. It plans to boost popular seafood products, such as oysters and abalone, to over $100 million in exports.

Meanwhile, the government also plans to reform 23 charges imposed on the public, citing them to be "invalid." Charges are financial obligations other than taxes imposed on goods and services with a purpose of creating a specific public benefit.

One of the reforms will expand the exemption for departure charges at airports to people under the age of 6. Currently, children under the age of 2 are exempt from these charges at airports. Also, it plans to drop school land fees imposed on small housings of 60 square meters or less.

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