Jeong Manki, Vice Chairman of Muhyup, "Korean Companies' Interest Burden Increases by 24 Trillion Won... Financial Support Must Be Expanded"

Martial Arts, Holds 'Export Companies Financial Difficulties Review Meeting' on 15th
Need to Strengthen Special Low-Interest Rates and Loan Repayment Deferrals for Export Companies

Jung Manki, Vice Chairman of the Korea International Trade Association.
Photo by Asia Economy DB

[Asia Economy Reporter Han Ye-ju] As domestic companies face increasing interest burdens, there are calls to temporarily expand financial support.

The Korea International Trade Association (KITA) held a "Meeting to Review Financial Difficulties of Export Companies" on the 15th at the Trade Tower in Samseong-dong, discussing policy tasks to overcome financial difficulties with export companies and financial experts.

Jung Manki, Vice Chairman of KITA, opened his remarks by stating, "Following COVID-19, the global price increases caused by the Russia-Ukraine conflict and the resulting benchmark interest rate hikes by various countries and the Bank of Korea have worsened financial conditions, expanding the financial difficulties of our export companies."

According to the Bank of Korea, a 0.25%p increase in interest rates raises corporate interest burdens by 27 billion KRW. Therefore, with eight benchmark interest rate hikes since August last year, it is estimated that the interest burden on our companies has increased by about 24 trillion KRW.

Vice Chairman Jung pointed out, "Recently, as the capital market tightens, large corporations are increasing their use of bank loans, while banks are tightening loan screenings, making it difficult for creditworthy small and medium-sized export companies to secure bank financing."

He continued, "The previous high-interest rate policies have been effective, and with the end of COVID-19 and even the Russia-Ukraine war beginning to come into sight, the fundamental causes of global price increases are starting to ease. Although uncertainties remain, considering that the end of the crisis is now visible, it is necessary to expand government support such as special low-interest rates, temporary deferment of principal and interest repayments, and extension of guarantee periods so that our export companies can overcome this period well."

He also expressed his position regarding the Safe Freight Rate System.

Vice Chairman Jung stated, "Unlike truck drivers who overcome difficulties through collective power such as the Cargo Solidarity, many scattered small export businesses find it difficult to properly voice their difficulties while watching the truck drivers or political circles. In this regard, the Safe Freight Rate System, which has unclear traffic safety effects, is unprecedented worldwide, and especially, since the shipper?who is not even a contracting party?can be punished simply because they requested the transportation of goods, this system should be immediately abolished."

He added, "The general strike announced by the Cargo Solidarity on the 24th, following the one in June, will be a selfish act causing even harsher difficulties for the small and medium export industries facing survival crises. Considering that export companies as shippers must survive for truck drivers and transport companies to also survive and grow together, the three logistics parties?shippers, truck drivers, and transport companies?should come up with a 'Win-Win-Win' alternative."

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