By Kang Yoon-seung
SEOUL, Sept. 5 (Yonhap) -- South Korea plans to expand incentives for foreign direct investment (FDI) in Asia's fourth-largest economy as part of measures to cope with growing uncertainties stemming from the escalating trade dispute between the United States and China, the industry ministry said Thursday.
South Korea received US$26.9 billion worth of FDI commitments in 2018, up 17.2 percent from a year earlier, according to the ministry. It was the fourth consecutive year it surpassed the $20 billion mark.
However, setting yet another record this year could be challenging amid the growing U.S.-China trade friction.
And in July, Japan began regulating exports to Seoul of industrial products crucial to the production of chips and displays, casting cloud over South Korea's technology businesses.
To beef up the amount of FDI arriving here amid the trade disputes, the industry ministry said it will expand cash incentives for companies making investment in the parts, materials and equipment sectors.
South Korea will simplify the process for foreign companies to win construction permits for factories as well, according to the ministry.
"We need to guarantee that all foreign firms that made investment pledges here, even those from Japan, face no hurdles in rolling out their businesses," an official from the industry ministry said.
Tokyo cited South Korea's alleged lax export control system for sensitive materials as the ostensible reason behind its export restrictions, but Seoul believes the move came in response to its top court's rulings that ordered Japanese firms to compensate Koreans forced into labor during Japan's 1910-45 colonial rule of the country.
Japan removed South Korea from its list of trusted trading partners last month, and Seoul is set to reciprocate the move this month.
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