25 Related Organizations and Associations Collaborate to Address Supply Chain Issues (Comprehensive)

Expansion of Government and Related Agencies' Discussion Bodies on Industrial Supply Chain Shocks... Increasing from 10 to 25 for Enhanced Response

On the 14th, as international oil prices surged due to Russia's invasion of Ukraine, fuel price information was displayed at a gas station in Seoul where domestic gasoline prices are rising. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Park Sun-mi] The government has decided to significantly expand the number of participants in the consultative body addressing supply chain risks from the original 10 organizations to 25. This move comes as Korea faces urgent, comprehensive supply chain challenges due to successive global unforeseen variables and the widening range of industries affected by supply chain disruptions.

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 working-level personnel.

This will be the first practical working-level meeting since the official launch of the Global Supply Chain Analysis Center last month, led by the government. Initially, the global supply chain risk response meeting was planned to be held with 10 organizations: 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. However, the scope of participants has now been expanded to 25.

The additional 15 organizations will mainly consist of associations and related institutions in the resource and energy sectors, which are affected by the global surge in raw material prices and supply disruptions. For example, despite the sharp rise in international oil prices due to Russia's invasion of Ukraine, energy-related associations such as the Korea Petroleum Association and the Korea Petrochemical Industry Association were initially excluded from the 10-member 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 conflict and the rapid spread of COVID-19 in China, which has led to the lockdown of Shenzhen, a global hub for IT products, and the strengthening of quarantine measures to near-lockdown levels in nearby Shanghai, intensifying the urgency of global supply chain risk responses.

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."

The Ministry of Trade, Industry and Energy will also operate a 'One-Stop Window for Resolving Supply Chain Difficulties' to respond to lockdown measures in major Chinese cities due to the surge in COVID-19 cases. The Materials and Components Supply Response Support Center will be designated as the one-stop window for addressing supply chain difficulties related to China's COVID-19 lockdowns, establishing a support system through organic cooperation with overseas diplomatic missions in China, KOTRA, the Korea International Trade Association, and the Korean Chamber of Commerce.

For identified supply difficulties, available networks such as KOTRA will be fully mobilized to discover and facilitate contracts with alternative import countries in third countries. Additionally, if necessary, the government plans to actively consider measures such as expedited customs clearance at the inter-governmental level and exemptions from the 52-hour workweek regulation.

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

Meanwhile, the Global Supply Chain Center is closely monitoring the possibility that ongoing economic sanctions against Russia and Russia's retaliatory measures worldwide could affect the global economy as a whole. This includes not only cost-push inflation caused by rising commodity prices but also potential supply chain bottlenecks.

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 exacerbated global supply chain disruptions that previously fueled inflation in the US and Europe.

Center Director Cho Sang-hyun stated, "If the situation prolongs, the surge in raw material prices is expected to worsen corporate difficulties, and especially for Korea, which has a high trade dependency, supply chain problems could arise across industries. If energy and raw material supply disruptions continue to drive price increases, 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.