South Korea’s top fiscal policymaker and conglomerate leaders meet Friday to promote public-private cooperation amid the post-coronavirus economy and pending market challenges including the semiconductor supply shortage.
“We are now facing a watershed moment in which the industrial circles and the government have to join forces in order to overcome incumbent challenges,” said Deputy Prime Minister and Finance Minister Hong Nam-ki.
During his meeting with the chiefs of domestic economic representations at the headquarters of the Korea Chamber of Commerce and Industry, the fiscal chief pointed to the semiconductor supply shortage and the global supply chain restructuring as key hurdles for Korea’s technology-based, export-reliant economy.
His remarks came as key carmakers -- including No. 1 player Hyundai Motor -- consecutively shut down their manufacturing facilities this month, due to the lack of automotive chips.
Hong also added that the government will consider offering a tax deduction for memory semiconductor research and development, while adding speed to deregulation for innovative businesses, in a move to encourage investments.
Earlier in the day, the government unveiled a financial package to inject some 367.9 billion ($330 million) into future mobility R&D and to drastically increase the state budget for automotive semiconductors.
Embracing the government’s cooperative gesture, KCCI Chairman and SK Group Chairman Chey Tae-won reciprocated that the public-private partnership will lay the foundation to the post-pandemic economic recovery.
“We look forward to a new partnership that will be mutually beneficial to both the government and the industrial circles,” Chey said.
He, however, added concerns on the persisting hurdles in the domestic market, especially the service sectors.
“Many believe that the economy will somehow recover the pre-coronavirus status, but we need to face reality as it is, in a cool-headed stance,” he said.
“The virus has added fuel to the market and technology changes and this is a trend we may no longer resist. The only thing left for us to do is to embrace the changes, seize the opportunities, and to create new values.”
Speaking for the entire industrial circles, Chey also called for policy considerations for the struggling small-sized businesses, in addition to the already-implemented financial support.
Meanwhile, the Korea Employers Federation Chairman and CJ Group Chairman Sohn Kyung-sik proposed a special pardon for Samsung Group chief Lee Jae-yong who is currently in detention for high-profile bribery allegations.
“I suggested (to the deputy prime minister) that (Samsung Electronics) Vice Chairman Lee Jae-yong be pardoned and released,” Sohn told reporters after the meeting.
“(The pardon) is not up to the deputy prime minister to decide but the government will hopefully make the related discussions.”
Also attending the meeting were the Korea International Trade Association Chairman and LG Group Chairman Koo Ja-yeol and the Federation of Small and Medium Business Chairman Kim Ki-mun.
By Bae Hyun-jung (email@example.com