‘Fundamentals of Korean economy strong’

14-Aug-2019 Intellasia | Korea Times | 6:02 AM Print This Post

President Moon Jae-in has urged the public to be wary of “fake news” on market uncertainty, stressing that South Korea’s economy remains strong despite Japan’s trade retaliation and looming external political risks which stem mostly from Japan recently removing South Korea from a list of countries granted preferred trade status.

“As is shown by the world’s leading credit rating agencies’ consistent assessments, our economic fundamentals remain solid,” Moon said Tuesday at the weekly Cabinet meeting, according to Cheong Wa Dae press pool reports.

Citing a recent Fitch Ratings analysis, which maintained its “AA-” for South Korea with a stable rating outlook, the President said the assessment was two grades higher than Japan’s “A.”

“The government should be on alert for fake news, false information and exaggerated prospects that exacerbate market jitters,” Moon said. “It goes without saying they are not the proper diagnosis, and do harm to our economy.”

Seoul on Monday decided to remove Japan from its own list of trading partners that have preferential treatment in export procedures, instead putting Japan in a newly established third bracket. This third bracket means that South Korean exporters of 1,735 strategic products to Japan now require more stringent documentation and a lengthier application process period.

The decision by Seoul, if implemented, would present additional risks of aggravating the bilateral trade friction, according to Cheong Wa Dae officials.

While South Korea’s latest move offers “no relief” to the South Korea-Japan trade tension, the President said the outlook of the South Korean economy is “looking quite solid,” though he admitted Japan’s trade retaliation adds to the uncertain outlook.

At the meeting, President Moon also asked government agencies to work together to make swift decisions and put them into practice.

“Time never waits for us,” the President said. “It will be tough to boost the competitiveness of our economy and relevant industries affected by the Japanese decisions, if we hesitate (to take actions) at a time when all countries around the world are going all-out to do so in the rapidly changing global market.”

On July 4, Japan put in place an up-to-90-day process for its exports to South Korea of three types of materials including polyimide, etching gas and photoresist. Tokyo also promulgated a decision to remove South Korea from its list of trading partners with preferential treatment on export procedures, which will take effect on August 28. South Korea said the trade retaliation was due to its Supreme Court rulings last year ordering Japanese firms to compensate surviving South Korean victims of wartime forced labour.

The President called for the need to expand the government’s spending to develop in particular the components sector crucial to Seoul’s manufacturing sector.

After the Cabinet meeting, Moon held a luncheon with independence patriots and their descendants by inviting them to the presidential office. The event came two days before the 74th anniversary of Korea’s liberation from the 1910-45 Japanese occupation.

“We have never stopped running toward the future, rather than staying in the past (since the August 15 Liberation Day in 1945),” Moon said. “We have also formed a future-oriented and amicable relationship with Japan. Both countries made efforts to open a new future for peace and prosperity.”

The President said the government will continue to do its best to seek diplomatic solutions and come up with measures to minimise possible damage to local companies and the public.

“There are reports that South Korea may limit the supply of computer memory chips to Japan, but that’s simply untrue as South Korea doesn’t want to twist the global supply chain in the sector,” a presidential aide told reporters in a briefing, Tuesday afternoon.



Category: Korea

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