The South Korean government has announced plans to create a 5 trillion-won ($3.59 billion) fund to provide low-interest rate loans to companies crucial for stable supply chains. Additionally, the government will offer tax incentives for the corporate development of key technologies, the finance ministry stated on Thursday.
This initiative is part of a comprehensive plan aimed at stabilizing supply chains for major materials and enhancing economic security amid growing global supply chain challenges. South Korea, in particular, is heavily dependent on foreign countries for natural resources and key materials.
The new basic law on supply chain stabilization came into effect on Thursday, as reported by Yonhap news agency. Under this plan, the government will designate leading businesses that diversify their import channels for major industry items or develop substitute technologies to reduce reliance on foreign supplies. These businesses will be eligible for low-interest loans for a period of three to five years.
Starting in the second half of this year, the government will activate up to 5 trillion won in supply chain stabilization funds. This fund aims to support companies in securing stable supplies of essential materials.
Moreover, the government has decided to add 100 more items to its “economic security items list,” bringing the total to 300 items. These items are critical to sectors such as manufacturing, defense, logistics, and cybersecurity, which are closely linked to the everyday lives of people.
While the ministry did not disclose the specifics of these items due to security concerns, experts believe that materials like urea, lithium, and graphite are likely included. The items will be categorized based on their importance, and the government will develop detailed plans to ensure their stable supply.
The government will review and update the list annually to adapt to changing needs and ensure ongoing stability in the supply chain. This effort underscores South Korea’s proactive measures to mitigate risks associated with global supply chain disruptions and to strengthen its economic security.
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