Market Update: FSC vice chair outlines gov’t plan to shift to equity investment, spur regional growth – Full Analysis

 

Korea aims to shift its economic model away from real estate-driven growth toward one centered on equity investment under a more trusted capital market environment, Financial Services Commission Vice Chairman Kwon Dae-young said Wednesday.

 

Speaking at the 2026 Korea Economic Forum held at the Westin Josun Hotel in central Seoul, Kwon outlined the government’s key financial policy agenda for the year.

 

“Real estate poses a major economic and social risk for Korea,” he said. “At the individual level, excessive leverage is being used to invest in property, while banks continue to rely on collateral-based lending and interest margins, which do little to support productive economic activity.”

 

To address this, the government aims to reduce the economy’s heavy concentration in real estate and redirect capital toward sectors such as artificial intelligence and semiconductors.

 


 

Under the Lee Jae Myung administration, a series of measures has been introduced to curb speculative demand in the housing market, including tighter mortgage restrictions on owners of multiple homes and a requirement that owners reside in their properties. These efforts aim to contain rising household debt and prevent capital from being concentrated in nonproductive assets.

 

Financial Services Commission Vice Chairman Kwon Dae-young delivers a keynote speech at the 2026 Korea Economic Forum on March 25, outlining the government’s key financial policy agenda for this year. The event took place at the Westin Josun Hotel in Jung District, central Seoul. [PARK SANG-MOON]

 

As part of this broader strategy, the government plans to launch the National Growth Fund, a public-private investment program that will mobilize 150 trillion won ($100 billion) over five years. The fund will target 12 advanced industries, including semiconductors, AI, biotechnology, defense and nuclear energy, as well as energy and infrastructure.

 

“This initiative will include large-scale flagship projects,” Kwon said, citing a 2.5 trillion won low-interest financing package for Samsung Electronics’ Pyeongtaek semiconductor facility in Gyeonggi as an example.

 

The project refers to Samsung’s P5 fab, a mega investment exceeding 60 trillion won in total. With government-backed support, the company plans to bring forward the production timeline from 2030 to 2028 to strengthen its competitiveness in advanced memory chips and AI semiconductor manufacturing.

 

Of the 150 trillion won fund, half will be raised through government-guaranteed bonds, while the remaining 75 trillion won will come from private-sector financing. The fund will also be open to foreign investors and will support Korean companies expanding overseas.

 


 

Around 40 percent of the funding will be allocated to regional areas outside the capital region to support balanced development, particularly in areas rich in energy resources such as renewable power and electricity infrastructure.

 

The government is also moving to strengthen the resilience and credibility of Korea’s capital markets, which have seen strong gains to reach record-high figures this year despite recent volatility linked to the Iran war.

 

Financial Services Commission Vice Chairman Kwon Dae-young delivers a keynote speech at the 2026 Korea Economic Forum on March 25, outlining the government’s key financial policy agenda for this year. The event took place at the Westin Josun Hotel in Jung District, central Seoul. [PARK SANG-MOON]

 

“Among our key initiatives is addressing issues such as dual listings of parent and subsidiary companies, as well as introducing measures to improve valuation metrics for undervalued firms — encouraging companies to enhance their price-to-book ratios through targeted reforms,” Kwon said.

 

“Korea also operates the Kosdaq market, comparable to the Nasdaq, and we are working to segment it more clearly by distinguishing between mature, high-quality firms and growth-stage companies. This will improve market clarity and help investors make more informed decisions.”

BY LEE JAE-LIM [[email protected]]