South Korea Plans $4 Billion Investment to Expand Container Ship Fleet

South Korea's president plans to invest $4 billion in financing to expand the nation's container ship fleet, adding one million TEU in capacity. This move aims to increase the fleet to 2 million TEU by 2030, with a focus on eco-friendly vessels. HMM, the national champion carrier, stands to benefit from this funding.
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South Korea’s president, Yoon Suk Yeol, has announced plans to invest $4 billion in financing to expand the nation’s container ship fleet, aiming to add about one million TEU in capacity to the global fleet. This initiative is part of a larger effort to increase the size of national shipping companies’ fleets and make them more eco-friendly. By 2030, the goal is to have a total fleet of 2 million TEU, with 60 percent of vessels being eco-friendly.

If successful, this expansion would effectively double South Korea’s fleet and add approximately 900,000 TEU to the global supply of cellular capacity, representing a three percent increase. The move is expected to benefit national champion carrier HMM, in which the Korean government holds a majority stake. Additionally, President Yoon has pledged to boost Korea’s port-automation technology sector and support green initiatives with significant funding.

However, South Korea’s industrial-policy programs have faced criticism from Japan, which has filed trade complaints with the WTO over alleged subsidies to the shipbuilding industry. While the Korean government denies subsidizing its industry, Japan has raised concerns about state financial support programs for domestic yards and vessel operators. The WTO’s rules restrict state-backed funds, loans, and guarantees, but enforcement of these regulations can be challenging.

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