Ulsan Dong-gu, Geoje, and 3 Other Areas Granted 2-Year Extension as Special Industrial Crisis Response Zones

[Sejong=Asia Economy Reporter Kwon Haeyoung] The designation period for five industrial crisis response special zones, including Dong-gu in Ulsan, Geoje in Gyeongnam, and Jinhae-gu in Changwon, which was scheduled to expire at the end of this month, will be extended by two years.

The Ministry of Trade, Industry and Energy decided this on the 28th after the Ministerial Meeting on Strengthening Industrial Competitiveness.

The areas where the designation period for the industrial crisis response special zones has been extended this time are Dong-gu in Ulsan, Geoje in Gyeongnam, Jinhae-gu in Changwon, Tongyeong·Goseong, and Mokpo·Yeongam·Haenam in Jeonnam, all of which have a high regional economic dependence on the shipbuilding industry. Due to the downturn in the shipbuilding industry, the management difficulties of major shipbuilders and partner companies have spread to an overall economic recession in the region, leading to their designation as industrial crisis response special zones in May 2018. Since then, as the recovery of the shipbuilding industry and regional economy has been delayed, the designation period has been extended twice.

Over the past three years, the government has supported businesses and small merchants with management stabilization funds and maturity extensions. However, last year, the sharp decline in shipbuilding production and orders, along with the spread of COVID-19, has continued to cause stagnation in regional industries and the economy.

By region, recovery in Dong-gu, Ulsan and Geoje has been delayed as large shipbuilders have not yet fully started operations, and production activities have slowed in nearby areas densely populated with small and medium shipbuilders and equipment suppliers. In areas such as Jinhae-gu in Changwon and Tongyeong·Goseong, the acquisition and merger procedures of medium-sized shipbuilders have either recently been completed or are ongoing, resulting in failure to restore previous production volumes and employment levels. In Mokpo·Yeongam·Haenam, despite the recovery of leading companies such as Hyundai Samho and Daehan Shipbuilding, the commercial districts of the hinterland cities remain depressed.

An official from the Ministry of Trade, Industry and Energy stated, "Although shipbuilding orders have recently shown signs of recovery, it will take more than two years for the recovery of regional industries and the regional economy, including production and employment." He added, "To ensure the prompt recovery of the extended regions, we will maintain existing support measures and work with local governments and related ministries to prepare additional support plans if necessary."

In particular, support for small and medium enterprises and small merchants to alleviate management difficulties and maintain employment, as well as livelihood stabilization and reemployment support for workers and the unemployed, will continue. Along with strengthening the competitiveness of core industries such as technical support for shipbuilding equipment companies and development of eco-friendly and high value-added ship technologies, plans are in place to establish a stable growth foundation for the regional economy through fostering complementary industries such as offshore wind power, advanced machinery, aviation, and tourism.

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