Amid the COVID-19 Pandemic, the 'Reshoring' Trend... Gyeongbuk Province Supports 40% of Land Purchase Costs

Promotion of Special Cases for Use of State-Private Shared Property... Full Effort to Attract Domestic Return Companies Including Support for Smart Factories

Gyeongsangbuk-do Provincial Government Office building.

[Asia Economy Yeongnam Reporting Headquarters Reporter Dongwook Park] Gyeongsangbuk-do is actively promoting reshoring measures to relocate Chinese-invested companies, which have high demand for relocating workplaces due to manufacturing and supply chain disruptions after the COVID-19 pandemic, to the province.

According to Gyeongbuk Province on the 17th, to resolve initial funding difficulties related to land acquisition for reshoring companies, they plan to establish special usage provisions for national and public property in the investment attraction ordinance. Through this, they intend to implement various measures such as ▲private contracts for factory sites ▲calculation and reduction of rent ▲priority occupancy in rental-only complexes on national and public land.

Gyeongbuk Province plans to alleviate the burden of land acquisition by prioritizing the sale of sites to overseas-returning companies in rental-only complexes within Pohang Blue Valley Industrial Complex and Gumi 5th Industrial Complex to ease the burden of securing location funds needed in the early stages of domestic investment. When reshoring companies purchase land, up to 40% of the land acquisition cost and up to 24% of equipment subsidies will be supported. An internal policy has been set to additionally provide 10% of the equipment subsidy if the number of employees is 80 or more.

To support securing price competitiveness through labor cost reduction, Gyeongbuk Province has secured provincial funds for smart factory construction projects and decided to give additional points to reshoring companies to reduce the burden ratio for companies returning domestically.

On the 29th, a business meeting to attract reshoring companies will be held at Gumi City Hall, chaired by the governor, with about 20 representatives of parent companies of overseas-invested companies, the Ministry of Industry, Gumi City Hall, Korea Trade-Investment Promotion Agency (KOTRA), and about 50 officials from the province and city/county governments. In May, to induce the return of Chinese-invested companies with relocation demand due to supply chain collapse in China, economic officials from Gyeongbuk Provincial Office visited five parent companies producing automotive parts in the province, accelerating their activities.

Lee Cheol-woo, Governor of Gyeongbuk Province, emphasized, "We will devise measures to ensure that reshoring companies relocating to Gyeongbuk Province face no difficulties in management by reflecting comprehensive support policies regarding location, equipment, and funding," and added, "We will continue communication with businesspeople to properly reflect field voices in policies so that reshoring policies can be effective."

Meanwhile, on the 1st, the government announced at an emergency economic meeting chaired by the president that for reshoring companies in the metropolitan area, priority allocation within the total factory volume and new support for local investment promotion subsidies only for attracting advanced industries and R&D centers will be established.

In this regard, Gyeongbuk Province judged that the concentration of reshoring large corporations in the metropolitan area, where production facilities are established and workforce supply is smooth, will lead to worsening imbalance between the metropolitan area and local regions, and requested the government to prepare customized support measures for local areas.

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