Kwon Young-se “Bold Reshoring Incentives and Radical Support for Returning Companies Needed”

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[Asia Economy Reporter Yoo Byung-don] Kwon Young-se, Vice Chairman of the Presidential Transition Committee, called for bold support policies for reshoring companies (companies that return to their home country after expanding overseas) in the era of global unlimited competition.

On the 18th, at the full meeting of the transition committee in Samcheong-dong, Seoul, Vice Chairman Kwon mentioned the lockdown in Shanghai, China, stating, "There are increasing companies facing difficulties in business activities abroad and considering reshoring for various reasons." Regarding this, he said, "About 3,000 Korean companies operating in Shanghai are suffering significant damage," and added, "We must accurately and promptly assess the current situation to minimize the damage to our companies and Korean residents."

Vice Chairman Kwon explained, "Due to the COVID-19 pandemic, US-China conflicts, and the Ukraine situation, external uncertainties have increased, and various costs including wages and logistics have soared, leading to a growing perception that having domestic production bases is relatively safer and more advantageous." He pointed out, "While the US and Japan are preparing policies such as subsidies to support reshoring of their domestic companies, Korea remains a country where it is still difficult for companies to return even if they want to."

He continued, "The reason making corporate return difficult is not only labor costs but also the overlapping layers of regulations that companies actually struggle with."

Vice Chairman Kwon emphasized, "Even when considering reshoring, the vivid testimonies of businesspeople are that it is difficult to decide on reshoring if they recall past experiences of giving up new businesses due to domestic regulations." He stressed, "In the era of global unlimited competition, our government must also implement bold incentives for reshoring." He added, "Unnecessary regulations should be removed to promote corporate return, and support for returning companies should be exceptional. Promoting domestic returning companies is directly linked to job creation. If the number of returning companies increases, jobs for young people will increase."

Vice Chairman Kwon has been nominated as the Minister of Unification.

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