Discovered 5.8 Trillion Won in Private Investment... Lowering Barriers for SMEs and Ventures to Enter Military Supplies Market

Complex Shopping Malls and Power Plants Construction
100 Trillion Won Investment Project Accelerates
150,000 Private Sector Jobs Creation Project to Begin in July

[Asia Economy Reporter Jang Sehee] The government is accelerating its goal of 100 trillion won investment projects this year by additionally discovering private investment projects worth 5.8 trillion won. It also plans to lower the barriers for venture and small and medium-sized enterprises (SMEs) to easily enter the defense industry.

On the 11th, the government held the 6th Emergency Economic Central Countermeasures Headquarters (Economic CECH) meeting at the Government Seoul Office, chaired by Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki, and finalized the "Plan to Strengthen the Foundation for Private Job Creation through Investment Activation, etc." which includes these measures.

First, out of the 25 trillion won in corporate private investment, the remaining 5.8 trillion won will be quickly discovered in the second half of the year, and the execution of 5.2 trillion won in private investment projects and the discovery of new projects worth 10 trillion won plus alpha will be promoted within the year. The government explained that through economic organizations such as the Korea Chamber of Commerce and Industry, it has identified potential investment demands such as the construction of complex shopping malls (Shinsegae), the establishment of advanced chemical complexes, and power plant construction (POSCO Energy). The government also plans to complete 100% execution of 60.5 trillion won in public investment within the year.

To strengthen the venture ecosystem through expanded venture investment, the government plans to prepare and announce in July a plan to allow general holding companies limited ownership of corporate venture capital (CVC). It will also introduce preferential guarantees worth 1 trillion won for innovative SMEs in infrastructure sectors such as non-face-to-face and digital. To expand overseas capital venture investment, the obligation to establish domestic branches will be relaxed when overseas investment companies form single venture funds. In particular, the scoring and deviation will be adjusted so that technologically capable venture companies or SMEs can be selected as defense parts developers.

Additionally, out of 550,000 plus alpha direct jobs, 150,000 private jobs including 50,000 youth digital jobs, 50,000 youth work experience jobs, and 50,000 SME hiring subsidies will have guidelines prepared to be implemented in July.

The government will also secure liquidity by preparing an asset purchase program worth 2 trillion won plus alpha centered on the Korea Asset Management Corporation (KAMCO) for companies selling assets, proactively expanding the demand base in areas where asset sale market formation is difficult. First, by establishing price appraisal standards, KAMCO will directly purchase assets and then sell them to third parties, or support companies to sell assets at appropriate prices through various acquisition methods such as purchase and leaseback (S&LB) or purchase with acquisition rights.

The government plans to activate information sharing and matching support functions through the Corporate Restructuring Center to ensure this program serves as a catalyst for private capital inflow, and will seek joint investments with the Corporate Restructuring Fund, management participation private equity funds (PEF), pension funds, and others.

On the same day, to alleviate difficulties faced by SMEs and small business owners due to the prolonged COVID-19 pandemic, the government also announced plans to further expand the scope and content of support related to the use of state-owned properties. The reduction of state-owned property usage fees, previously limited to small business owners, will be extended to SMEs, reducing rent by 40% (from 5% to 3% of property value), allowing rent payment deferral for up to six months, and lowering the delinquency interest rate from 7-10% to 5%.

Furthermore, the government will promote the so-called "K-Quarantine 3T International Standardization" to establish the globally recognized "K-Quarantine" as the international standard. This will systematize the entire process from testing and confirmation (Test), epidemiological investigation and tracing (Trace), to isolation and treatment (Treat).

Deputy Prime Minister Hong emphasized, "June is a very important time both in terms of quarantine and the economy," adding, "To recover and rebound the economy, we will sprint at full speed, gaining maximum acceleration during the run-up phase centered on the Economic CECH."

This content was produced with the assistance of AI translation services.