South Korean President Park Geun-hye yesterday unveiled a three-year plan to rebalance the country’s export-reliant economy by investing US$3.7 billion on start-ups, boosting domestic spending and getting more young people and women into the workforce.
Park announced the plan on the day she completed her first year in office and said that it would deliver a potential economic growth rate of at least 4 percent by 2017.
“Our past ... way of growth that made us one of the world’s 10 largest economies has now reached its limit,” Park said in a national televised speech.
Photo: AFP / YONHAP
Asia’s fourth-largest economy faces a widening imbalance, with the export and manufacturing sector totally overshadowing the domestic consumer market and services industry, she said.
Park also highlighted the dangers posed by what she called South Korea’s “silent, looming disaster” — a rapidly aging population that threatens to slash the workforce and impose a heavy welfare cost.
“Unless we change the fundamentals of the economy and break from the trap of slow growth, there will be no future for us,” she said.
The nation’s economy grew 2.7 percent last year.
According to the three-year plan, the government will spend 4 trillion won (US$3.7 billion) by 2017 to help small start-ups and increase spending on research and development to the equivalent of 5 percent of the GDP, from the current 4 percent. It will also ease an array of regulations on five key service industries: healthcare, education, finance, tourism and software.
In a bid to spur domestic spending, the plan also aims to build more homes and offer low-interest loans for families desperate to enter the property market.
South Koreans’ household debt — mostly housing loans — amounts to nearly 140 percent of their disposable income on average, making it one of the highest rates in the world.
“Solving the issue of housing debt ... is the first priority to spur consumer spending,” Park said, promising to reduce the debt ratio by 5 percentage points by 2017.
While opinion polls have shown a healthy approval rating for the president after hew first year in office, she scores far higher marks for her foreign policy than for her handling of the economy.
A series of surveys commissioned by leading newspapers have put public disapproval of her economic policy at about 50 percent.
One of the country’s top dailies, the Dong-A Ilbo, compared her economic team to “a student who is full of motivation, but knows little about how to study and ends up being an underachiever.”
South Korea’s first female president came to office vowing more gender equality and in her speech yesterday, offered more childcare services for working mothers and incentives for companies that hire more women and young people.
“All aspects of our economy, including domestic spending and exports, manufacturing and services, big conglomerates and small and medium firms and the capital city and the rest of the country, should show balanced growth so that all South Koreans will be able to enjoy fruits of growth,” Park said.
Park’s plan aims to boost the employment rate from about 60 percent to 70 percent by 2017.
She also vowed to reform debt-ridden state-run firms long criticized for poor management, corruption and over-generous benefits for workers.
“Such long-running problems should no longer hamper our economic growth,” she said, warning of heavier punishment for corruption and tighter requirements on state-run firms’ financial health.
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
FACTORY SHIFT: While Taiwan produces most of the world’s AI servers, firms are under pressure to move manufacturing amid geopolitical tensions Lenovo Group Ltd (聯想) started building artificial intelligence (AI) servers in India’s south, the latest boon for the rapidly growing country’s push to become a high-tech powerhouse. The company yesterday said it has started making the large, powerful computers in Pondicherry, southeastern India, moving beyond products such as laptops and smartphones. The Chinese company would also build out its facilities in the Bangalore region, including a research lab with a focus on AI. Lenovo’s plans mark another win for Indian Prime Minister Narendra Modi, who tries to attract more technology investment into the country. While India’s tense relationship with China has suffered setbacks