South Korea said Monday it will invest 7.8 trillion won ($6.47 billion) in 100 key strategic items to create a stable supply by 2024, in the latest move to cope with Japan's economic retaliation.

"We will upgrade the competitiveness of the materials, parts and equipment industries," Hong Nam-ki, minister of economy and finance, said in a meeting with officials in Seoul.

Last week, Japan decided to remove South Korea from a list of countries subject to preferential trade status in apparent anger against last year's South Korean Supreme Court rulings ordering Japanese firms to compensate South Korean victims of forced labor.

In July, Japan also imposed tighter regulations on exports to South Korea of three materials -- resist, etching gas and fluorinated polyimide -- that are critical for the production of semiconductors and flexible displays.

Japan's export curbs have prompted South Korea to diversify supplies of key industrial materials and boost their localizations to reduce heavy reliance on Japan. South Korean companies have also been scrambling to find alternative suppliers of key items.

Of the 100 key strategic items, the industry ministry said it plans to secure supplies of 20 items within a year by reaching out to suppliers in other countries, including the United States and China.

The government will lower barriers for imports of such materials, including the three materials whose imports were restricted by Japan last month.

Fluorine polyimide is used to make flexible organic light-emitting diode displays, resist is a thin layer used to transfer a circuit pattern to a semiconductor substrate, and etching gas is needed in the semiconductor fabrication process.

In addition to diversifying efforts, South Korea will spend some 7.8 trillion won for R&D to help local industries beef up its own competitiveness, according to the Ministry of Trade, Industry, and Energy.

The government will ease various regulations, including labor rules, to help local industries to speed up the development of key technologies as well.

South Korea will also prod local firms to seek acquisitions of foreign rivals that hold high-level technologies, by providing them with financial and tax incentives.

"(The blue print) focuses on finding solutions for South Korea's weakness in the materials, parts, and equipment industries, including its heavy dependency on a certain country," Industry Minister Sung Yun-mo said in a briefing.

South Korea's trade deficit with Japan reached $24.1 billion in 2018, with most of that amount -- an estimated $22.4 billion -- coming from industrial materials, parts, and equipment sector, according to the ministry. (Yonhap)