Minister of Industry to Announce GVC Restructuring Measures by End of June

Sung Yun-mo "Green New Deal to be concretized within 2-3 years... Energy transition and greenhouse gas reduction projects to be derived"

Sung Yoon-mo, Minister of Trade, Industry and Energy. / Photo by Moon Ho-nam munonam@

[Asia Economy Reporter Moon Chaeseok] Amid calls for the reorganization of the global value chain (GVC) centered on China due to the COVID-19 pandemic, the government announced that it will unveil reorganization measures by the end of next month.

On the 14th, Sung Yun-mo, Minister of Trade, Industry and Energy, held a press conference at the Government Complex Sejong and announced that the government will present GVC reorganization measures, including attracting returning companies.

Minister Sung stated that the "Post-COVID Industrial Strategy" will be presented around July to August. By then, it is expected that the impact of COVID-19 on the global and Korean economies can be anticipated.

Among the eight post-COVID tasks announced on the 6th?▲ GVC reorganization ▲ Establishment of production bases without shutdowns (temporary work stoppages) ▲ Spreading 'K-Quarantine' and 'K-Bio' as global standards ▲ Fostering non-face-to-face industries ▲ Innovation in the energy industry and response to low oil prices ▲ Enhancing corporate vitality and supporting new industry investments ▲ Solidarity among economic agents ▲ Exercising global trade leadership?each will be assigned to officials at the director level or higher to prepare measures.

Minister Sung said, "The Ministry of Trade, Industry and Energy is reviewing comprehensive measures that include corporate efforts, industrial policy efforts, international cooperation efforts, and policies for returning companies," adding, "If possible, the GVC reorganization measures will be announced around next month."

He also announced that the 'Digital Growth Promotion Act' will be enacted in the second half of the year. Under the concept of 'Industrial DNA+,' it will include specific details on industrial intelligence by sector, such as roots industries, textiles, steel, and shipbuilding.

He stated that the government will take the lead in advancing 'digital trade services' across the entire logistics process?including international trade, marketing, contracts, and customs clearance?due to changes in the GVC.

Minister Sung pledged to identify projects within 2 to 3 years that can achieve energy transition and greenhouse gas reduction effects.

Specifically, these projects will be ▲ those that can simultaneously achieve energy transition and greenhouse gas reduction ▲ projects that can be developed from a 'growth' perspective rather than simply expanding existing businesses ▲ projects that involve actual budget allocation and can generate economic ripple effects.

Minister Sung said, "The foundation of the Green New Deal is 'greenhouse gas reduction,' and industries, power generation, transportation, buildings, and others sequentially have significant impacts on greenhouse gas emissions," adding, "How to transform the main industries has emerged as a new challenge, and since one of the key features of the new era is 'environmental friendliness,' we are considering how to combine small individual elements into a larger framework, which will be concretized."

He added, "In the short term, since the main industries are experiencing liquidity difficulties, related measures will be presented first, followed by consideration of Green New Deal projects."

Regarding win-win job policies such as the 'Gwangju-type job,' Minister Sung said efforts will be made to expand incentives as much as possible along with GVC response directions.

He said, "Of course, incentives and material support are important, but it seems that the location is determined by comprehensively reviewing systems, institutions, FTAs, investment in Korea, and conditions for entering other countries," adding, "We will try to expand incentives as much as possible in the GVC response direction and work with related ministries and experts to develop how to further expand our strengths and play a role as a global transparent production base."

He stated that electricity rates will not be reviewed in connection with the 9th Basic Plan for Electricity Supply and Demand. Earlier, on the 8th, Yoo Seung-hoon, chairman of the general subcommittee of the advisory body for the 9th plan, stated, "Since electricity rates are not included in the scope of review specified in the Electricity Business Act, the committee did not conduct an analysis of electricity rates related to energy transition."

Minister Sung said, "The issue of rates is not reviewed together with the basic plan," adding, "As officially announced last year, we are reviewing rationalizing the current electricity rate system, and if necessary, we will review the content along with the review work."

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