"Korea, 5 Key Keywords to Watch: Vaccine, New US Administration, Economic Stimulus, Eco-Friendly, New Markets"

[Asia Economy Reporter Ki-min Lee] This year, it has been argued that South Korea should pay attention to five major keywords related to key countries: vaccines, the new U.S. administration, large-scale economic stimulus, eco-friendliness, and new markets in Southeast Asia.

On the 14th, the Federation of Korean Industries (FKI) presented the core keywords representing the situation in five major countries and regions (the United States, China, Europe, Japan, ASEAN) this year, along with South Korea’s response strategies.

The FKI selected vaccines as the first key keyword this year. Since the global economic recovery is expected to depend on the speed and effectiveness of COVID-19 vaccine distribution, South Korea must make every effort to secure and distribute global vaccines and develop its own vaccines to avoid falling behind other countries.

Furthermore, it is anticipated that the new U.S. administration, led by President-elect Joe Biden, which will take office at the end of this month, will have an impact on the global environment comparable to vaccine distribution rates. The U.S. is expected to strengthen cooperation with multilateral organizations such as the World Trade Organization (WTO) and the World Health Organization (WHO), rejoin the Paris Climate Agreement, and emphasize multilateralism by rejoining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Accordingly, the FKI argued that South Korea needs to make efforts to play a certain role in international organizations and also build solidarity with countries exposed to similar environments amid U.S.-China conflicts.

The FKI also selected large-scale economic stimulus plans by major countries to overcome COVID-19 as a key keyword. In December last year, the U.S. agreed on a second economic stimulus package worth $900 billion, emphasizing infrastructure development and education. Europe is also scheduled to provide financial support worth approximately €750 billion. China plans to invest 1,700 trillion won over the next five years in seven new infrastructure facilities, including 5G. Southeast Asian countries such as Indonesia and Thailand are also promoting large-scale infrastructure investments. South Korea should actively enter economic stimulus projects in the U.S., China, Europe, and Southeast Asia and utilize them as business opportunities.

Strengthening the eco-friendly policy stance is another key keyword. Decarbonization and eco-friendly policies are expected to be reinforced, centered on the U.S., Europe, and Japan. The U.S. plans to invest $5 trillion in eco-friendly sectors over the next ten years, aiming for net-zero carbon emissions by 2050. Europe is also reviewing plans to reduce greenhouse gas emissions by 55% compared to 1990 levels by 2030. Japan has officially announced its '2050 carbon neutrality' goal and plans to establish a 2 trillion yen fund to support decarbonization research and development. The FKI expects South Korea’s eco-friendly vehicle and battery industries to perform well and emphasizes the need for active investment in eco-friendly technology and product development.

Lastly, the FKI selected the rapid rise of new markets in Southeast Asia as a key keyword. Southeast Asia is not only a new battleground for sovereignty disputes in the South China Sea due to China’s maritime expansion but also a central region in the U.S. Indo-Pacific strategy and is rapidly emerging as a new global production base. Korean companies need to continuously monitor the restructuring of global value chains (GVC) in response and strengthen relationships with local governments and companies. Kim Bong-man, head of the FKI International Cooperation Office, said, "Korean companies should actively pursue business opportunities using these keywords."