South Korea plans a record budget spending next year to help boost the country's exports, which have been lackluster for months in the face of growing trade frictions, such as that between the United States and China, the trade ministry said Friday.
The budget of 1.07 trillion won (US$891 million), earmarked to promote exports and diversify overseas markets, will be the first to break the 1 trillion-won mark, according to the Ministry of Trade, Investment and Energy.
The country also plans to provide an additional 3.7 trillion won to the trade insurance fund next year to support exporters, the ministry.
Outbound shipments from Asia's No. 4 economy nosedived 13.6 percent in August from a year earlier, extending their slump to nine consecutive months amid a protracted downturn in the semiconductor sector and weak demand from China, which has been in a trade dispute with the U.S. since last year.
The U.S. and China, the world's two largest economies, are also South Korea's top two trade partners.
"South Korea needs to find a new growth engine for exports. It is important that the country builds a stable export structure through diversifying export destinations and securing a stable global supply chain," Industry Minister Sung Yun-mo said.
The country plans to capitalize on hallyu, the popularity of South Korean culture, to further appeal to overseas customers in emerging markets, especially in Southeast Asia.
The country also intends to diversify its portfolio of outbound shipments to advanced economies to meet various needs, according to the ministry.
Expanding support for revitalizing the country's exports is also crucial for the government as Seoul is engaged in its own trade dispute with Tokyo.
In July, Japan imposed restrictions on exports to South Korea of three key industrial materials, apparently in response to Seoul's Supreme Court rulings against Japanese firms last year over wartime forced labor.
Last month Tokyo also dropped Seoul from its list of trusted trade partners. In response, the Seoul government is planning to do the same for Japan this month. (Yonhap)