South Korea will make full use of its free trade agreements and promising smaller companies to meet its exports target this year and invest in future-oriented services and industries, economy-related ministries said Thursday in their joint report to the president.
The 2015 economic policy goals also include merging information technology into the manufacturing sector to build "smart" factories and research and development in industrial materials, parts design and engineering.
The report, presented to President Park Geun-hye, set this year's exports target at over $600 billion and foreign direct investment at more than $20 billion. Both targets represent gains from last year.
An emphasis has been placed on exports, with overseas shipments making up 42.91 percent of the country's GDP in 2013.
To achieve these goals, the Ministry of Trade, Industry and Energy said the government will focus more on utilizing the FTAs instead of seeking new trade pacts.
"Once the FTA with China is ratified, South Korea will be the only significant economy in the world that has open trade regimes with the world's top three powerhouses," said Kwon Pyung-oh, head of the ministry's trade and investment office. Seoul already has FTAs with the United States and European Union.
In the past 10 years, South Korea has reached FTA agreements with 57 countries, of which 48 have been ratified so far. If all agreements go into effect, Seoul would have open trade pacts with countries that account for 73.5 percent of the world's gross domestic product, placing it third after Chile and Peru, which have signed more FTAs.
Kwon said the government will help small and medium enterprises that have the capability to sell goods abroad but have been constrained by a lack of trained employees and knowledge about foreign trade rules.
The ministry will work with the Korea International Trade Association to set up a "China Desk" in March to develop products that can be sold in the world's No. 2 economy, he said.
The report was the second by economic ministries, following the finance ministry-led round earlier this week. Thursday's report was participated in by the Ministry of Science, ICT and Future Planning, the Financial Services Commission, Korea Communications Commission and the Small and Medium Business Administration
The report said Seoul will seek to upgrade existing FTAs with India and The Association of Southeast Asian Nations and engage in trade pact talks with some Latin American, Central Asian and African countries.
To assist SMEs, policymakers said 2,400 companies will receive support in the form of specialized experts hired by the government who have extensive experience in exports. The government will also provide a "Trade NAVI" service that can give managers easy access to data and knowhow on shipping goods abroad. Trade NAVI will provide information via smartphones, a world first.
The government will designate 270 trading companies to help SMEs, up from 167 last year.
"Such measures will allow SMEs to account for 35 percent of the country's exports in 2015 from 34 percent last year," the trade ministry said.
Increasing the portion of exports handled by SMEs is critical for more balanced growth and a reduction in the country's dependence on a handful of large conglomerates, such as Samsung and Hyundai Motor Co.
The Ministry of Science, ICT and Future Planning outlined its manufacturing reform plan 3.0 to revamp the industry as a whole.
The plan calls for merging information technology with the manufacturing process so 10,000 second and third-tier vendors can have "smart" factories.
The reform program, moreover, calls for the early development of next-generation products such as eco-friendly ships, smart cars, new central processing units, and unmanned aerial vehicles.
On research and development, the ministry said some 240 billion won ($221.9 million) will be injected up until 2017 to build up the country's capabilities in industrial materials, parts design and engineering.
Some 180 trillion won in "policy funds" will be allocated to help local companies, with 100 trillion won of the money earmarked to help future-oriented services and growth engine industries, the ministry said.
FSC reported it will set aside 10.5 trillion won to help launch new venture companies, with a 30 trillion won corporate investment promotion program to be set up by 2017.
"The purpose of such programs is to establish a support system that can fully help launch companies and allow them to grow, as well as ensuring the retrieval of state funds," the commission said.
On the country's broadcasting sector, the KCC said there will be policy measures this year to fuel growth of ultra high definition technology, along with multi-mode broadcasting service.
It said that the country will take the lead in smart media with the introduction of "over the top" technology that permits various information to be shown on advanced digital displays. (Yonhap)
