Jeonbuk Province Applies for Extension of Designation Period for Gunsan Special Industrial Crisis Response Zone

[Asia Economy Honam Reporting Headquarters Reporter Park Seon-gang] Jeonbuk Province announced on the 10th that it has applied for an extension of the designation period for the Gunsan Special Industrial Crisis Response Area (April 5, 2018 ? April 4, 2020), which was designated to recover the shipbuilding, automobile industries, and the regional economy, as the period is set to expire this April.

The requested extension period is two years (April 5, 2020 ? April 4, 2022), reflecting that Myungshin Co., Ltd., which acquired the former Korea GM Gunsan plant, will begin full-scale production activities starting in 2022.

Additionally, the application included a requirement that partner companies and related businesses associated with the Korea GM Gunsan plant, even if located in other cities or counties, be eligible to receive the same support projects as those in Gunsan City.

Jeonbuk Province also requested not only the extension of the designation period for the Special Industrial Crisis Response Area but also projects and proposals worth about 1 trillion KRW aimed at improving Gunsan’s economic structure and restarting the Gunsan shipyard.

The additional support projects requested by Jeonbuk Province to the central government for “economic situation improvement and regional development foundation establishment” total 37 projects amounting to 1.0274 trillion KRW (747.2 billion KRW from the central government, 280.2 billion KRW from local governments).

Specifically, there are 15 projects worth 730.6 billion KRW for employment stability and industrial structure improvement support (550.6 billion KRW central, 180 billion KRW local), and 22 projects worth 296.8 billion KRW for revitalizing the regional economy and supporting regional development infrastructure (196.6 billion KRW central, 100.2 billion KRW local).

Furthermore, four proposals were made to allocate new shipbuilding orders to reactivate the Gunsan shipyard.

Jeonbuk Province, through multifaceted and in-depth analyses including economic indicator analysis and field visits conducted with the Jeonbuk Development Institute, the Korea Institute for Industrial Economics & Trade, and Gunsan City, judged that the designation period extension is necessary due to prolonged economic recession caused by factory closures, accelerated regional economic contraction due to confirmed infectious disease cases, and ongoing vicious cycles such as population outflow.

The shipbuilding and automobile industries were core industries of Gunsan City and Jeonbuk Province, but the suspension of operations at Hyundai Heavy Industries Gunsan Shipyard and the closure of the GM Gunsan plant have led to a prolonged economic downturn in the Gunsan area.

The Ministry of Trade, Industry and Energy’s notification on the extension criteria for the Special Industrial Crisis Response Area includes quantitative criteria (industrial specialization, proportion of industrial workers, industrial structure diversity) and qualitative criteria (occurrence of operational suspension crises in two or more industries or core companies in the regional industrial ecosystem).

In the case of Gunsan City, it is judged to meet the qualitative criteria under Article 4, Paragraph 4 of the notification on designation criteria for the Special Industrial Crisis Response Area (a region where a serious regional economic crisis is deemed to have occurred due to operational suspension of two or more main industries or core companies in the regional industrial ecosystem). However, the final decision will be made comprehensively considering various conditions such as on-site inspections.

From this month to next, it is expected that the final decision will be made after on-site inspections by the field investigation team, review by the Regional Industrial Crisis Deliberation Committee, and submission to the Ministerial Meeting on Strengthening Industrial Competitiveness.

Song Ha-jin, Governor of Jeonbuk Province, said, “The extension of the designation period for the Special Industrial Crisis Response Area is an essential measure to overcome the economic crisis and regional economic devastation faced by the Gunsan area. We will closely cooperate with the central government to ensure swift procedural implementation, inclusion of support projects in the central government budget, and structural improvement of Gunsan’s industrial structure toward the future.”

This content was produced with the assistance of AI translation services.