The South Korean government will offer tax benefits and cheap loans to companies hit by China’s economic retaliation over Seoul’s deployment of a US missile shield as the protracted political standoff takes a toll on Asia’s fourth-largest economy.
Seoul plans to allow the affected local retailers including duty free shop operators to defer various kinds of tax payments for up to nine months to help them tide over China’s continued consumer backlash against Korean products.
It will also offer low-interest loans to car parts makers to ease their liquidity crunch as Korean automakers such as Hyundai Motor and Kia Motors suffer from sliding sales in their biggest market. The scheme will be funded by state-run institutions such as the Export-Import Bank of Korea and Korea Trade Insurance Corp.