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South Korean president invests in local firms fund amid Japan row

South Korean President Moon Jae-in has put more than 50 million won (around $41,000) of his own money into a fund investing in firms looking to replace Japanese suppliers. Photograph:( AFP )

AFP Seoul, South Korea Aug 26, 2019, 04.46 PM (IST)

South Korean President Moon Jae-in has put more than 50 million won (around $41,000) of his own money into a fund investing in firms looking to replace Japanese suppliers, his office said Monday, as the Asian neighbours remain locked in a bitter trade dispute.

It was the first-ever stock market investment by Moon, a former human rights lawyer whose economic policies critics blame for slowing growth in the once-booming South.

Seoul and Tokyo are embroiled in a tit-for-tat row that has seen them remove each other from their lists of trusted trade partners, raising concerns in Washington, which has security treaties with both.

Tokyo imposed restrictions on exports crucial to tech giants such as Samsung following a series of South Korean court rulings ordering Japanese firms to pay for forced labour during World War II.

Japan dominates the global market for some vital materials, but Moon has announced measures he hopes will help develop domestic supply chains.

The Victory Korea Fund was launched by Nonghyup Bank earlier this month to invest in listed South Korean firms that manufacture materials, components and equipment.

"It has become a very important time to raise the competitiveness of our materials, components and equipment industry," he said, according to his office.

Japan's new export restrictions last month caught South Korean firms off guard and sent tech giants such as Samsung and SK Hynix scrambling.

Both Japan and South Korea are market economies and major US allies faced with an overbearing China and nuclear-armed North Korea.

But their relationship continues to be heavily affected by Japan's 35-year colonial rule of the Korean peninsula in the early 20th century.

Japan says a 1965 treaty that normalised relations with a significant financial contribution effectively settled all reparation claims.
 

Story highlights

It was the first-ever stock market investment by Moon, a former human rights lawyer whose economic policies critics blame for slowing growth in the once-booming South.