[Exclusive] Government and Related Agencies Expand Discussion Bodies Amid Supply Chain Shock... Increasing from 10 to 25 for Response

Supply Chain Risk Response Working-Level Meeting on the 21st

[Image source=Yonhap News]

[Asia Economy Reporter Park Sun-mi] The government has decided to significantly expand the number of participants in the consultative body addressing supply chain risk from the previous 10 to 25. This move comes as South Korea's comprehensive supply chain response has become urgent due to successive global unforeseen variables, and the range of industries affected by supply chain disruptions has widened.

According to the business community on the 17th, the Ministry of Trade, Industry and Energy plans to hold a response meeting on the 21st with 25 organizations, including industry associations and related institutions, along with supply chain-related working-level officials.

This will be the first practical working-level meeting since the official launch of the Global Supply Chain Analysis Center led by the government last month. Initially, the global supply chain risk response meeting was planned to be held with 10 organizations including the Ministry of Trade, Industry and Energy, Korea International Trade Association, KOTRA, Strategic Materials Management Institute, Korea Machine Industry Promotion Association, Korea Semiconductor Industry Association, Korea Display Industry Association, Korea Automobile Manufacturers Association, Korea Iron and Steel Association, and Korea Robot Industry Association, but the scope of participants has now been expanded to 25.

The additional 15 organizations to be included are associations and related institutions in the resource and energy sectors, which are affected by the global surge in raw material prices and supply disruptions. In fact, despite the international oil price surge caused by Russia's invasion of Ukraine, energy-related associations such as the Korea Petroleum Association and the Korea Petrochemical Industry Association were not included in the initial list of 10 organizations in the supply chain risk response consultative body.

The date for the first working-level meeting was also moved up from the originally scheduled 24th to the 21st.

This urgency is due to the worsening Russia-Ukraine situation and the recent rapid spread of COVID-19 in China, which led to the lockdown of Shenzhen, a global hub city for IT products, and strengthened quarantine measures to a semi-lockdown level in nearby Shanghai, intensifying the urgency of global supply chain risk response.

An industry official said, "The significant expansion of the consultative body's participants and the advancement of the meeting date show how urgently the government feels about responding to supply chain risks."

On the same day, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, also checked the supply chain impact due to the spread of COVID-19 in China during the Emergency Economic Central Countermeasure Headquarters meeting held in the morning, discussing comprehensive inspections of supply chains and measures to resolve corporate difficulties.

The Global Supply Chain Center is closely monitoring the possibility that if economic sanctions against Russia and Russia's retaliatory measures continue, the impact could spread to the entire global economy. This includes not only cost-push inflation caused by rising commodity prices but also potential supply chain bottlenecks.

Additionally, in China, Shenzhen has been under city lockdown with stay-at-home orders and suspension of public transportation from the 14th to the 20th, and major regions such as Dongguan, Changchun, Jilin, Shanghai, and Beijing are also increasing quarantine levels. This raises the possibility of exacerbating global supply chain disruptions that have fueled inflation in the US and Europe.

Center Director Cho Sang-hyun said, "If the situation prolongs, the surge in raw material prices is expected to worsen corporate difficulties, and especially for South Korea, which has a high trade dependency, supply chain problems could arise across industries. If energy and raw material supply disruptions continue causing price surges, corporate profitability will deteriorate, and production disruptions will occur mainly in industries with high external dependency and vulnerable supply chains."

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