Vice Minister Ki Jae: "Supply Chain Stabilization Fund to Secure Resources through Government-Guaranteed Bond Issuance"

On the morning of the 14th, Bang Gi-seon, the 1st Vice Minister of the Ministry of Economy and Finance, is speaking at a meeting between companies and associations regarding supply chain stabilization held at the Korea Automobile Manufacturers Association in Seocho-gu, Seoul. 2022.9.14 [Image source=Yonhap News]

[Asia Economy Sejong=Reporter Son Seon-hee] The government is preparing a fund to stabilize the supply chain of core items directly linked to national economic security. The resources will be secured through the issuance of government-guaranteed bonds.

On the 14th, Bang Gi-seon, First Vice Minister of the Ministry of Economy and Finance, held a meeting on supply chain stabilization with companies and associations in the automobile and battery sectors at the Korea Automobile Manufacturers Association in Seocho-gu, Seoul. He stated, "We will establish the grounds for financial, tax, and financial support to stabilize the supply chain of industries related to national core items, and we will also prepare a supply chain stabilization fund."

Vice Minister Bang explained, "The supply chain stabilization fund will be prepared as a separate resource managed by policy financial institutions through the issuance of government-guaranteed bonds to proactively support items that may pose concerns to economic security and items that are difficult for companies." He added, "We will establish a crisis response system for rapid action in case a supply chain crisis occurs."

Regarding recent global trends in the automobile and battery industries, Vice Minister Bang said, "The industrial restructuring trend is significant." He explained, "China provides subsidies mainly for cars equipped with domestically produced batteries and has established the world's largest battery ecosystem. The United States, through the Inflation Reduction Act enacted on the 16th of last month, decided to provide subsidies only if the final assembly is in North America and a certain percentage of battery minerals and components come from the U.S. or other specified countries." Accordingly, he expressed concern, saying, "Countries are diversifying procurement of electric vehicle raw materials and parts from Australia, Chile, and others, causing raw material prices in those countries to surge, creating very high uncertainty due to supply chain restructuring."

He emphasized the government's need for support, stating, "Such supply chain instability can occur at any time in various industrial sectors depending on national interests."

In this regard, the government is also promoting the enactment of the 'Basic Act on Supply Chain Stabilization Support for Economic Security.' Vice Minister Bang said, "We will actively support companies to quickly overcome the supply chain risks they face and create new opportunities," and requested the interest and cooperation of related industries.

Earlier, on the 19th of last month, Vice Minister Bang held a meeting with six economic organizations including the Korea Employers Federation, Korea Federation of Small and Medium Business, Korea Federation of Medium-sized Enterprises, Korea Chamber of Commerce and Industry, Federation of Korean Industries, and Korea International Trade Association. The meeting was arranged to discuss directly with related company officials, and attendees included Kim Dong-wook, Vice Chairman of Hyundai Motor Group; Ko Chang-guk, Vice Chairman of SK On; Jung Dae-heon, Vice Chairman of POSCO Chemical; Lee Kyung-seop, Executive Director of POSCO Holdings; Kim Ju-hong, Chairman of the Korea Automobile Manufacturers Association Operating Committee; Ko Moon-su, Executive Director of the Korea Automobile Industry Cooperative; and Jung Soon-nam, Vice Chairman of the Battery Industry Association.

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