Moon stresses need to overtake Japan’s economy, vows to support “U-turn” companies

Aug 29, 2019, 08:39 am

By AsiaToday reporters Hong Sun-mi & Kim Byung-hoon

With Japan’s removal of South Korea from its whitelist of trusted trade partners taking effect on Wednesday, President Moon Jae-in repeatedly stressed the need to overtake Japan’s economy. In addition, the president pledged to actively support for the “U-turn” investment of domestic parts and material companies. The government also decided to inject 5 trillion won (US$4.1 billion) into its support of the local parts and material industries by 2022 to tackle Japan’s export regulations against the South.

“What we need right now is a will and confidence to safeguard our economy,” President Moon said in a groundbreaking ceremony for the construction of Hyundai Mobis’ major electric vehicle parts plant in Ulsan. “In this time when the free and fair trade regime is being shaken and politically-driven trade retaliation is taking place, we can only protect our economy on our own.”

Hyundai Mobis decided to return home after closing its two parts plants in China in consideration of the growing demand for eco-friendly cars. The company will start building a new plant next month, injecting 300 billion won (US$247 million) in investments. The new plant will be capable of producing 100,000 EV batteries a year, with its operation starting in 2021.

Hyundai Mobis’ Ulsan investment is the first case of a Korean conglomerate bringing its overseas manufacturing facility back home. “The auto parts maker’s decision of making a ‘U-turn’ investment raises hopes for the South Korean economy,” the president said. “The government will continue to give unstinting support to companies that invest back home.”

The government will also strengthen its support in research and development (R&D) projects for materials, parts and equipment to boost localization. It plans to select more than 100 vital industrial materials, such as semiconductors and displays, and invest more than 5 trillion won by 2022 to foster related R&D projects. It will also create a joint organization with private entities to improve the management of key industrial materials. The organization will belong to a special advisory committee under the presidential office.

The Ministry of Science and ICT as well as related ministries held the “Ministerial meeting on expanding response to Japanese export regulations and the 7th ministerial conference on science and technology” and finalized its investment strategy and innovation measures for R&D in materials, parts and equipment.

“Through strategic investment in R&D and innovation in the manufacturing process, we will reduce external reliance,” said Kim Seong-soo, who is in charge of technology innovation at the ICT Ministry.

#Hyundai Mobis #Moon Jae-in #u-turn #localization #Ulsan