South Korea launched a state-backed company on Thursday to help implement a $350 billion investment pledge in the United States, the centrepiece of a trade deal Seoul agreed with Washington in return for lower tariffs.
The Korea-U.S. Strategic Investment Corporation will manage and operate a strategic investment fund, after a special act governing the investments took effect, South Korea’s finance ministry said.
‘Great Transformation’
Park Jong-won, a former deputy minister for trade, was appointed its first chief.
“The corporation is a dedicated body to systematically promote investment cooperation between South Korea and the United States at a time of great transformation, when a new economic order is taking shape,” Park said.
“We will do our utmost to strengthen industrial cooperation between the two countries in strategic sectors agreed by both sides, including energy and shipbuilding.”
“Through the launch of the KUIC, the alliance between South Korea and the United States has developed beyond the economy and security to strategic industries, further advancing our solid partnership,” Finance Minister Koo Yun-cheol said during the opening ceremony in Sejong.
“South Korea and the U.S. will combine each other’s strengths to leap forward together as an indispensable hub in the global supply chain,” Koo added, reported Yonhap news agency.
Generating Cash
The corporation will help implement the broader $350 billion package, comprising $200 billion in strategic investments in advanced industries and other areas, and $150 billion in shipbuilding investments led by South Korean companies, according to the law governing the body.
Projects will be reviewed for their commercial viability, including whether they can generate enough cash flow to repay principal and interest, under South Korea’s special act and related implementing rules.
Potential projects include LNG and energy infrastructure, as well as advanced materials and battery supply chains, according to local media reports.
South Korean officials have said, however, no projects have been finalised and negotiations with Washington were continuing.
(with inputs from Reuters)
