Hong Nam-ki in London: "Minimizing the Impact of Global Supply Chain Disruptions"

First In-Person Briefing Held Since COVID-19 Pandemic

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki is seen answering investors' questions during the Korea Economic Briefing (IR) held at the Corinthia Hotel in London, UK, on the 1st (local time). (Photo by Ministry of Economy and Finance)

[Sejong=Asia Economy Reporter Moon Chaeseok] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, stated on the 1st (local time) that he will devote all efforts to minimizing the impact of global value chain (GVC) related disruptions on the Korean economy while meeting with overseas investors.

On the afternoon of the 1st (local time), Deputy Prime Minister Hong held the first face-to-face Korean economy briefing (IR) since COVID-19 at the Corinthia Hotel in London, UK, and made this announcement. It was the first briefing directly hosted by the Deputy Prime Minister in 2 years and 1 month since the briefing in New York, USA, in October 2019. Participants included Michael Elam, Head of HSBC Global Public Sector, Guy America, Head of JP Morgan Global Corporate Finance, Patrick Brenner, Head of Schroders Asset Management, and Lars Humble, Senior Syndicate Representative of Goldman Sachs.

In his keynote presentation titled "Korean Economy: The K-Drama of Overcoming the Pandemic," Hong introduced the globally successful "Squid Game" to highlight the resilience of the Korean economy. He emphasized that the secret to the success of K-dramas lies in decades of innovation, and similarly, the Korean economy has achieved excellent recovery results based on its unique resilience built through experiences overcoming past crises. He explained the recent achievements in overcoming the pandemic and the directions of short- and long-term policy responses in three episodes: "Successful Economic Quarantine → Efforts for Complete Recovery → Preparing for the Post-Pandemic Future."

Notably, during the Q&A session, Hong appealed to prominent foreign investors that Korea deserves to be included in the MSCI Developed Markets Index. He emphasized, "Considering the status of the Korean economy and the perception of overseas investors, I believe the justification for inclusion in the MSCI Developed Markets Index is sufficient." As evidence of the high trust the overseas financial market places in Korea, he cited ▲ Korea's ranking among the global top 10 economies last year, ▲ the issuance of foreign exchange bonds on the 7th of last month at historically low spreads (10-year dollar bonds at 25 basis points, 5-year euro bonds at 13 basis points; 1bp=0.01 percentage points), and ▲ the credit default swap (CDS) premium recording 17 basis points on September 15. He also explained on his social media that "through consultations with related agencies and MSCI, we plan to actively resume efforts to improve practical convenience for foreign investors and to push forward with index inclusion."

Regarding the increased volatility of GVCs due to the COVID-19 pandemic, Hong stressed that the Korean government has formed the Foreign Economic Security Strategy Meeting and is paying close attention to various areas such as raw material supply management and alleviating logistics disruptions. He forecasted that "due to efforts to strengthen competitiveness in materials, parts, and equipment in response to Japan's export restrictions in 2019, the impact of GVC shocks on the domestic market will be limited."

Additionally, he mentioned Korea's major economic policies including ▲ the Korean New Deal and fostering promising new industries (the Big 3 future cars and DNA industries such as AI), ▲ preparing fiscal rules and submitting them to the National Assembly, and ▲ pursuing policies to alleviate polarization such as minimizing household debt damage for actual borrowers.

The Ministry of Economy and Finance stated, "The government will continue to communicate closely with overseas investors to actively share the recovery achievements of our economy and further strengthen external credibility," adding, "We plan to use this opportunity to carefully review overseas perspectives and evaluations of our economy to enhance the timeliness and effectiveness of policies."

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