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Top office's 5-year blueprint focuses on AI, 'energy superhighway' as growth engines

Published: 13 Aug. 2025, 18:50

Song Kyung-hee, a co-chair of the economy subcommittee of the policy planning committee, speaks during the State Affairs Planning Committee's public report meeting at the Blue House's state guesthouse in Jung District, central Seoul, on Aug. 13. [YONHAP]

President Lee Jae Myung’s State Affairs Planning Committee on Wednesday introduced a draft blueprint for running the country over the next five years, putting growth engines like AI and a vast “energy superhighway” at the heart of his economic agenda while offering few immediate fixes for struggling manufacturing sectors.

The framework of the plan is built on three national governance principles, five policy goals and 123 detailed initiatives.

The second goal, which translates roughly to “An Innovative Economy Leading the World,” covers industry measures: fostering new industries like AI and biotechnology, creating a 100 trillion won ($72.7 billion) national growth fund to boost venture investment and building a so-called energy superhighway along the west coast to help meet the RE100 target of using only renewable power.

Critics note that the blueprint says little about Korea's traditional manufacturing, which still anchors the economy.

“Investing heavily in future industries like AI and the energy superhighway is important,” said Yang Jun-sok, an economics professor at the Catholic University of Korea. “But restructuring traditional manufacturing is a difficult and thankless task that must be pursued without delay.”

A large car carrier ship waits at the export shipping pier of Hyundai Motor’s Ulsan plant on July 28. [YONHAP]

Manufacturing accounted for 27.6 percent of Korea’s GDP in 2023, the second-highest share among members of the Organisation for Economic Cooperation and Development. Yet nearly all major sectors — from semiconductors and EVs to steel, petrochemicals and secondary batteries — are under pressure from Chinese competition.

Petrochemicals are showing the most strain. Yeochun NCC, the country’s third-largest ethylene producer — a basic industrial material — narrowly avoided default this year. LG Chem and Lotte Chemical are also losing money and have shut down some production lines.

Boston Consulting Group has warned that half of Korea’s petrochemical firms could close within three years if current conditions persist.

While the Ministry of Trade, Industry and Energy announced a plan to bolster petrochemical competitiveness last December and pledged follow-up measures by mid-2025, none have materialized.

Merchants operate as the live broadcast of the State Affairs Planning Committee’s public report meeting airs at a traditional market in Seoul on Aug. 13. [NEWS1]

Steel and secondary batteries are also feeling the pinch from China. Posco’s Pohang Steelworks posted its first-ever loss last year and U.S. tariffs of 50 percent on certain steel imports imposed in June have largely shut the door to the U.S. market. Secondary battery profits, once seen as a growth driver, have also slumped.

A recent Korea Chamber of Commerce and Industry survey of 2,186 manufacturers found that only 16.1 percent believed they still held a competitive edge.

Experts warn that Korea could miss its “golden time” for industrial restructuring.

“The shock from China is spreading quickly across domestic manufacturing,” said Joo Won, deputy director of economic research at the Hyundai Research Institute.

“The government must take the lead in restructuring to minimize losses, and both the public and private sectors should lay the groundwork for shifting to high-value products, integrating facilities and investing in environmentally friendly and new technologies to overhaul the industrial base.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom staff.
BY KIM KI-HWAN [[email protected]]