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Manufacturing sector crucial for economic growth: BOK chief

Citing mounting challenges in the global market, the chief of South Korea’s central bank on Tuesday urged for measures to improve the competitiveness of the manufacturing sector during a rare meeting with industry representatives.

“The competitiveness of the manufacturing sector will determine the survival of our economy,” said Lee Ju-yeol, governor of the Bank of Korea, at an economic meeting with officials from industries.

“We cannot guarantee sustainable growth without the support of the manufacturing sector.”

The event was a rare occasion in which the BOK chief sat face-to-face with industry officials, instead of economic experts and monetary policymakers.
Lee Ju-yeol, governor of the Bank of Korea (Yonhap)
Lee Ju-yeol, governor of the Bank of Korea (Yonhap)

“New terms such as smart factories, information technology convergence, global value chain and reshoring have been appearing frequently in the manufacturing sector,” Lee said.

“This suggests that the manufacturing sector and its surrounding business environment is undergoing structural changes in various perspectives.”

Also weighing on the manufacturing business is the collapse of conventional boundaries between the manufacturing and service sectors, he added.

“Manufacturing companies now have to compete not only with similar rivals but also with service providers,” Lee said.

The monetary policymaker also expressed concerns about the weakening global value chain, citing the trend of trade protectionism.

The reduced gap in labor costs between developed countries and developing countries has also acted as a disincentive for multinational companies to enhance their global value chain, according to Lee.

“Key countries such as Germany and the United States have been pushing ahead policy plans to promote their manufacturing business, viewing it as a crucial driving force for the economy,” he said.

“The latest market environment changes may be hostile for our economy but we should nevertheless come up with proper responses to turn these challenges into a new opportunity to bring the industry a notch higher.”

By Bae Hyun-jung (