If Japan’s bet is macroeconomic, Korea’s is industrial. President Lee Jae-myung has launched the Public Growth Fund, a public-private vehicle worth 150 trillion won (≈$104 billion) to be deployed over five years, with more than 30 trillion won invested in 2026 alone — 6 trillion for AI, 4.2 trillion for semiconductors, and 3.1 trillion for future mobility. The architecture is a deliberate mix of state guarantees, direct investment and concessional financing: 3 trillion won will be directly invested, 10 trillion will be allocated for infrastructure, and another 10 trillion will be offered at low interest rates. The first round targets seven strategic areas, including an advanced AI semiconductor foundry, the nurturing of a Korean AI chip firm, a national AI computing center, and materials for secondary batteries.
The market response has been spectacular: the KOSPI, which was around 2,770 when Lee took office, hit 8,000 for the first time in history on May 26, on the back of semiconductor recovery and AI optimism. In parallel, after closing the U.S. trade deal that committed Korea to $350 billion of investment on American soil, Samsung announced an additional 450 trillion won ($310 billion) in domestic investment over five years, including a new production line at Pyeongtaek slated to start operations in 2028, while Hyundai pledged another 125 trillion won through 2030.
Why it matters: Korea is proving that a state can still run credible industrial policy in frontier sectors, mobilizing private capital at scale. Where the EU talks about “strategic autonomy” and the U.S. deploys the IRA, Seoul is already executing. For investors and policymakers, the Lee model is the most interesting Asian counterfactual to Chinese statism — less coercive, more market-driven, with visible upside for minority shareholders.
Sources: Korea Times · Korea Herald · Korea.net · Stimson Center · KED Global