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Service sector regulations eased

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Published : 2014-08-12 21:42
Updated : 2014-08-12 22:12

South Korea will support the launch of profit-seeking foreign hospitals and expand the development of casino-focused integrated resorts in free economic zones to induce foreign investment, the government said Tuesday. It will also grant higher credit limits to innovative start-ups and develop more exporters.

These and other plans for promoting trade and investment were announced at a meeting presided over by President Park Geun-hye.

A series of deregulations in seven key service industry sectors ― health, medical, tourism, content, education, finance, logistics and software ― were at the core of the scheme from which the government expects some 15 trillion won ($14.6 million) of fresh investment and over 180,000 new jobs.
The model of the Yeongjongdo casino complex is displayed. (Yonhap)

In the areas of tourism and medical treatment, the government pledged to support for-profit foreign hospitals on Jejudo Island and in other free economic areas. In particular, the government signaled that it was ready to approve the establishment of China Stem Cell Health Group’s medical center on Jejudo Island as the nation’s first foreign-operated hospital. A final decision will be reached next month.

The Chinese medical group applied earlier this year to invest 50.5 billion won in opening a medical center specializing in plastic surgery and skin care.

The government previously rejected the group but is now expected to give its approval as the company gave up on its disputed stem cell treatment and also signed a memorandum of understanding with a local hospital.

“We asked the hospital to submit revised plans addressing stem cell treatment and partnerships with local hospitals,” said Chun Byung-wang, head of the Health Ministry’s public medical policy division.

In other FEZs around the country, the government will expand its support for the launch of integrated resorts, which are fully equipped with hotels, conference and performance halls, casinos and shopping malls.

There are currently four such complexes undergoing construction ― three in Yeongjongdo, Incheon, and one on Jejudo Island. When completed, these resorts are expected to create a total investment effect of 8.7 trillion won, according to the ministry.

In the financial sector, the government is set to ease loan regulations for technology companies, which have high growth potential but often lack tangible assets.

“The newly established Technology Credit Bureau will build a technology database, which banks may refer to when assessing loans,” said a Finance Ministry official.

The government also said it planned to increase the daily stock price fluctuation limit to 30 percent from 15 percent, a ceiling that has been in place for more than 15 years. The move is aimed at injecting vitality into the stock market, it explained.

The wider band will be applied first to the main bourse. Whether to apply it to the tech-savvy KOSDAQ market has yet to be decided.

To help spur exports and particularly electronic trade, the government decided to develop 10,000 new small and medium-sized exporters by 2017.

The Trade Ministry said in its report to the president that it plans to increase the number of small and medium-sized enterprises (SMEs) involved in exporting by 10,000 to a total 100,000 by 2017. To support the plan, the ministry will expand the overall size of the country’s trade finance programs while freshly offering up to $100,000 in trade insurance to first-time exporters.

The state-run Export-Import Bank of Korea will also offer special interest rates to these first-time exporters.

Currently, only 2.7 percent, or about 87,000 out of 3.2 million SMEs, in South Korea are engaged in trade.

“Creating 10,000 new export companies by 2017 will help create a new export market worth up to $20 billion per year,” Kwon Pyung-oh, head of the ministry‘s trade and investment policy bureau, said in a press briefing.

By Bae Hyun-jung and Shin Ji-hye
(tellme@heraldcorp.com) (shinjh@heraldcorp.com)

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