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(LEAD) S. Korea to up service exports to US$250 bln by 2030

Economy 14:16 June 05, 2023

(ATTN: UPDATES throughout with details)
By Kang Yoon-seung

SEJONG, June 5 (Yonhap) -- South Korea's finance ministry said Monday the country plans to expand its service exports, including entertainment contents and health care, to US$250 billion by 2030 with the goal of becoming the world's seventh-largest exporter in the sector.

The amount marks a twofold rise from $130 billion in 2022, the world's 15th-largest, according to the Ministry of Economy and Finance. The government aims to reach the target of $200 billion by 2027.

"Considering high value-added benefits and job creation made by service exports, we need to secure new growth engines by vitalizing such exports that have been stagnant so far," the ministry said in a statement.

The proportion of service exports was about 15.9 percent compared with South Korea's total outbound shipments of commodities in 2022, remaining nearly unchanged from the 15.2 percent reported back in 2010.

(LEAD) S. Korea to up service exports to US$250 bln by 2030 - 1

According to the government data, South Korea's service exports primarily depended on transportation and construction in the past, which took up 47 percent and 14.4 percent, respectively, in 2010.

In 2019, however, the construction segment accounted for 26.1 percent, while tourism and information and communication technology industries accounted for 20.1 percent and 7.4 percent.

South Korea's exports of entertainment contents also posted an almost four-fold growth from $3.2 billion to $12.4 billion from 2010 to 2021, it added.

The finance ministry noted the blueprint came as South Korea has been focusing on supporting shipments of the manufacturing sector, with the country lacking a control tower that can manage the overseas sales of the service industry.

"Until now, not only have supportive measures for service exports lagged behind those provided for the manufacturing sector, but there have also been criticisms regarding their failure to adequately address the unique nature of the industry," Finance Minister Choo Kyung-ho said in a statement.

"We plan to revamp the supportive system for exports into a service-friendly one and bolster customized support to prominent areas, including content, tourism, health care, and digital services," he added.

The finance ministry said South Korea needs to proactively utilize the full potential of the country's robust soft power, particularly hallyu, alongside its strong competitiveness in manufacturing and IT sectors, as well as its notable achievements in economic diplomacy and free trade agreements.

Hallyu refers to the global popularity of Korean pop culture.

To this end, South Korea plans to offer export finance of 64 trillion won (US$48.9 billion) through 2027, including 12 trillion won reserved for this year.

The government will review its tax policies to offer benefits to service providers that comes in line with those provided to commodities exporters.

The government said it also plans to have its export-related state firms, including the Korea Trade-Investment Promotion Agency (KOTRA) and the Korea SMEs and Startups Agency, have the service sector take up at least 50 percent of its projects by 2027, compared to the current estimate of around 20 percent.

KOTRA will seek to foster some 400 exporters specialized in the service sector within the year.

The government will team up with local trading companies to find new business partners in emerging service sectors such as health care.

In the medical sector, South Korea has outlined plans to cultivate caretakers and interpreters, aiming to enhance the convenience for foreigners seeking health care services in the country.

Additionally, South Korea will establish a comprehensive "one-stop" portal, enabling medical institutions to access overseas laws and policies as they venture into the global market. The government will also introduce the "K-healthcare" label to identify approved organizations.

To further promote the tourism industry, the government plans to ease regulations on filming at historic sites, such as palaces, and open up a terminal for private jets at Incheon International Airport, the country's main gateway located just west of Seoul.

"We plan to support joint projects rolled out by the manufacturing and service sectors by expanding the on-going global partnering project that currently focuses on the materials, parts and equipment businesses," it added.

To expand its export portfolio, the government will harness trade agreements, as well as official development assistance projects to find more opportunities in the medical and technology sectors.

The government will have existing and upcoming pacts cover the digital sector to provide non-discriminatory treatments for South Korean entertainment companies.

(LEAD) S. Korea to up service exports to US$250 bln by 2030 - 2


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