President Moon: "Market liquidity of 3,000 trillion won... Focus on productive investment, not real estate" (Update)

"'Even at the cost of 'reduced washing''... Emphasizing 'Stock Market Revitalization'"

President Moon Jae-in is presiding over a senior secretaries and aides meeting at the Blue House on the afternoon of the 20th. 2020.7.20 [Image source=Yonhap News]

[Asia Economy Reporter Son Sun-hee] President Moon Jae-in said on the 20th, "The country's market liquidity has already exceeded 3,000 trillion won," adding, "The government must devise all policy measures to ensure that the excess liquidity flows into sound and productive investments rather than unproductive sectors such as real estate."

President Moon presided over a senior secretaries and aides meeting at the Blue House in the afternoon and stated in his opening remarks, "Making money flow into productive sectors should be the top policy goal, and efforts should focus on promoting corporate investment and revitalizing a sound financial market."

In response to the economic crisis caused by the novel coronavirus disease (COVID-19), countries worldwide are maintaining ultra-low interest rates and focusing on expanding liquidity supply. South Korea is also maintaining interest rates in the 0% range and increasing liquidity among major economic agents to overcome the crisis. President Moon emphasized that this capital must flow into productive investments.

He then presented the recently announced comprehensive plan for the "Korean New Deal" project as an alternative investment destination. President Moon said, "The government has announced the largest fiscal investment plan ever for a single national project, but national finances alone are not sufficient," adding, "We need to actively consider establishing a New Deal fund involving finance and private capital, so that the massive liquidity in the market gathers into the Korean New Deal projects and the profits can be shared."

He continued, "The flagship projects of the Korean New Deal were selected with special attention to those with significant private sector ripple effects," emphasizing, "I am confident that the Korean New Deal will become an attractive investment destination for finance and the private sector." He also urged the government and the National Assembly, saying, "I hope various support measures will be prepared to activate financial and private participation," and "I ask for accelerated institutional improvements to remove obstacles to expanding private investment in cooperation with the National Assembly."

Regarding the supplementary measures for the upcoming financial tax reform plan, President Moon said, "The core is the revitalization of our stock market," adding, "Even if it means somewhat accepting a 'reduction in tax revenue,' it should be a measure that encourages the sound investment of small individual investors and boosts investment motivation." He further requested, "Please also consider comprehensive policy measures that actively incentivize long-term investment, such as providing incentives for long-term investments."

He also emphasized the rapid promotion of a 100 trillion won investment project in three new industries: bio, system semiconductors, and future cars, as well as the activation of ventures and startups.

President Moon said, "The launch of the Smart Korea Fund, starting with more than 1 trillion won this year and reaching 6 trillion won by 2025, is a very important initiative," adding, "It is expected to support growth in non-face-to-face sectors in the post-COVID era, the bio industry including vaccines, therapeutics, medical devices, and new drug development, green products, alternative energy, and green venture companies such as upcycling." He also reiterated, "We must actively create an environment where sufficient market liquidity flows into highly innovative venture companies by promptly concluding and introducing corporate venture capital."

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