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  • Hyungji I&C Accelerates Expansion into China and Japan with Asian Fit Strategy
    Hyungji I&C Accelerates Expansion into China and Japan with 'Asian Fit' Strategy Hyungji I&C announced plans to intensify brand exports to China and Japan in the second half of this year. The company aims to leverage its accumulated brand competitiveness and expertise in 'Asian fit' design to penetrate overseas markets.CEO Choi Hye-won has been meeting with local representatives in China and Japan to discuss distribution strategies and establish partnerships for international business.In China, Hyungji I&C signed a strategic memorandum of understanding (MOU) with the Korea-China Business Support Association on June 18 in Shanghai. Following this, the association invited representatives to South Korea for a product evaluation meeting and a department store tour. In the second half of the year, the company plans to open an official brand account on the Chinese short-form video platform Douyin and collaborate with influencers to expand online sales. They are also working on establishing a local pop-up store based on an agreement with the state-owned Shanghai Xuhongqiao Enterprise Service Co., aiming to connect online and offline channels to reach local consumers.In the Japanese market, the women's clothing brand 'Carisnote' will take the lead. Starting in the second half of the year, local distributor Fashion Net will begin product buying, producing customized items that reflect the body types and preferences of Japanese consumers, with plans to showcase initial quantities in early November. Sales will primarily occur through the local home shopping channel Shop Channel.Hyungji I&C believes that its product planning capabilities, quality competitiveness, and experience in designing for consumers with body types similar to Koreans will provide a competitive edge in international markets.Notably, the shirt brand 'Yejak' has recorded cumulative sales of 8.49 million units since joining the Fashion Group Hyungji in 2013 through June of this year. The women's brand 'Carisnote' saw online sales increase by 182% in the first half of this year compared to the same period last year, with overall sales rising by more than 10% during the same timeframe.A representative from Hyungji I&C stated, 'We plan to expand our overseas market penetration based on localization strategies tailored to the characteristics of Chinese and Japanese consumers and the product competitiveness of our Asian fit designs.'* This article has been translated by AI. 2026-07-14 11:56:00
  • Hanmi Semiconductor Reports Record Q2 Operating Profit of 130.3 Billion Won
    Hanmi Semiconductor Reports Record Q2 Operating Profit of 130.3 Billion Won Hanmi Semiconductor achieved its highest quarterly performance since its founding, driven by increased investments in artificial intelligence (AI) semiconductors. The surge in demand for TC bonders, essential equipment for high-bandwidth memory (HBM) production, along with the ramp-up of investments in next-generation HBM4, has resulted in top-tier profitability in the global semiconductor equipment industry.On July 14, Hanmi Semiconductor reported consolidated revenue of 251.1 billion won and an operating profit of 130.3 billion won for the second quarter of this year. Compared to the same period last year, revenue increased by 39.5%, while operating profit rose by 51.0%. The operating margin reached a record high of 51.9% for the quarter.This performance was fueled by increased investments in HBM production facilities due to the expanding AI semiconductor market. Hanmi Semiconductor is currently the global leader in the TC bonder market, which is critical for HBM stacking processes. As global memory companies began mass production of HBM4 this year, the demand for new equipment surged, along with a corresponding increase in demand for MSVP (Micro Vision Placement) equipment.Investments in HBM are expected to continue for the foreseeable future. Major memory companies are preparing to start mass production of the next-generation HBM4E by the end of this year, which is likely to drive demand for next-generation TC bonders capable of handling 12-layer and 16-layer stacking.Global memory firms are also ramping up their investments. Micron has acquired production facilities from Taiwan's AUO and PSMC to expand its HBM production capacity and is also increasing HBM packaging production facilities in Singapore, Idaho, and New York. Recently, it announced plans to raise its semiconductor investment in the U.S. from $200 billion to $250 billion, alongside packaging investments in Hiroshima, Japan.Hanmi Semiconductor is also accelerating the development of next-generation products. The company plans to unveil a prototype of its second-generation hybrid bonder by the end of this year and launch a wide TC bonder in the first half of next year. The second-generation hybrid bonder is aimed at the HBM market, which is expected to gain momentum after 2029.The company is also strengthening its focus on the AI system semiconductor packaging market. Hanmi Semiconductor is supplying 2.5D packaging equipment, including the '2.5D TC Bonder 40', 'FC Bonder 3.5', and 'FC Bonder 75', to global foundries and OSAT (Outsourced Semiconductor Assembly and Test) companies. With the recent expansion of panel-level packaging (PLP) applications in AI semiconductor packaging, demand for related equipment is also on the rise.A Hanmi Semiconductor official stated, "We are expanding our supply of 2.5D packaging equipment in line with changes in the AI semiconductor market and will continue to provide advanced equipment in a timely manner to sustain our growth in the evolving AI packaging market."* This article has been translated by AI. 2026-07-14 11:48:00
  • South Korea Expands Sovereign Wealth Fund with New Strategic Investment Account
    South Korea Expands Sovereign Wealth Fund with New Strategic Investment Account The South Korean government is expanding its sovereign wealth fund by establishing a new strategic investment account within the Korea Investment Corporation (KIC). This initiative aims to provide long-term patient capital for domestic and international strategic investments, supporting three major projects: semiconductors, artificial intelligence (AI) data centers, and physical AI.On July 14, during a Cabinet meeting chaired by President Lee Jae-myung at the Blue House, the government presented its economic growth strategy for the second half of 2026.The strategy emphasizes fostering global competitive growth engines as a key task to boost potential growth rates. The government plans to accelerate the implementation of the three major projects while reforming the sovereign wealth fund and expanding the National Growth Fund to ensure adequate funding.Initially, the establishment of a separate corporation was considered for managing the sovereign wealth fund, but the decision was made to create the strategic investment account within KIC. This approach leverages KIC's existing experience and global network to enhance investment capabilities swiftly.The strategic investment account will serve as a channel for supplying long-term patient capital for domestic and international strategic investments. Its funding will come from government contributions, donations, and operational profits, with profits reinvested, distributed as dividends, or returned to the national treasury to prevent misuse.Investment targets will focus on strategic industries, including the three major projects, essential industries such as finance and infrastructure, and sectors related to national competitiveness and economic security. The government also plans to promote collaborative investments with foreign sovereign wealth funds to attract private and foreign capital into domestic strategic industries.To address concerns about the credibility of foreign exchange reserves, the government will implement measures to strictly separate the existing KIC foreign exchange reserve account from the new strategic investment account. A so-called 'firewall' will be established between the two accounts to ensure that the management of foreign exchange reserves and strategic investment functions do not interfere with each other.Lee Hyung-il, Deputy Minister of Finance, stated, “Currently, KIC has a strong savings-type sovereign wealth fund character, but by adding strategic sovereign wealth fund functions, it will become a comprehensive sovereign wealth fund. However, we will ensure that a firewall is effectively built to prevent mutual influence.”The government's motivation for reforming the sovereign wealth fund is to ensure that the semiconductor boom does not become a temporary economic cycle. With the AI transformation improving semiconductor exports and corporate performance, the strategy aims to connect large-scale investments with increased production capacity and industrial ecosystems to boost potential growth rates.In the semiconductor sector, the government plans to expand memory production capacity and support next-generation power semiconductors. Initiatives include the early completion of fabs in Yongin and Pyeongtaek, the establishment of semiconductor fabs in the southwestern region, and the creation of a testing ground for advanced semiconductor materials and components to maintain a competitive edge.For AI data centers, the focus will be on large-scale investments and establishing a global AI hub. The government will support the construction of AI data centers and work with major international organizations to attract AI cooperation centers to South Korea. Additionally, it will lay the groundwork for activating the data economy through the enactment of a national data basic law.In the physical AI sector, support will be strengthened for seven leading areas, including robotics, autonomous driving, and smart manufacturing. The government plans to select five teams for independent AI model development, ultimately concentrating support on two elite teams to develop globally competitive AI models.Another pillar for funding strategic industries will be the National Growth Fund. The government plans to launch an additional 600 billion won in a public participation-type National Growth Fund in the third quarter, aiming to support over 15 trillion won in funding in the second half of the year.A super-innovation economy fund will be established within the National Growth Fund to enhance support for leading projects in super-innovation economies, such as sensors, actuators, and secondary batteries for humanoids, while backing the commercialization and practical application of advanced technologies.The government will also reform its research and development support methods. It plans to introduce investment-type R&D that includes contributions, creating a structure that allows for recovery and reinvestment. This approach aims to enhance the sustainability and efficiency of financial support for advanced industries.A Ministry of Finance official remarked, “It is crucial to connect the opportunities created by the semiconductor boom with large-scale investments and productivity improvements, rather than letting them slip away as a temporary cycle. We will supply long-term capital needed for strategic industries through the sovereign wealth fund and the National Growth Fund.” 2026-07-14 11:48:00
  • Government to Ease Tax Benefits Reduction for Growing Small Businesses
    Government to Ease Tax Benefits Reduction for Growing Small Businesses The government is set to address the issue of rapidly diminishing tax benefits for small businesses transitioning to mid-sized enterprises, a problem often referred to as the 'growth ladder disruption.' The plan aims to redesign the tax, financial, and regulatory support systems to facilitate the advancement of promising small businesses into mid-sized firms.On July 14, during a Cabinet meeting chaired by President Lee Jae-myung at the Blue House, the government reported on its economic growth strategy for the second half of 2026.This strategy includes measures to overcome polarization by supporting small businesses, micro-enterprises, and vulnerable groups. The government has decided to shift its approach from merely protecting small businesses to promoting investment and growth.To achieve this, the government will reduce the abrupt decrease in tax benefits that occurs when small businesses grow into mid-sized companies. Currently, as businesses expand, they face a sudden reduction in key tax supports, such as special tax deductions for small businesses, which has been identified as a deterrent to growth.To mitigate this, the government will introduce a 'gradual reduction zone' where the special tax deductions for small businesses will decrease incrementally as they transition to mid-sized status. Additionally, measures will be implemented to lessen the reduction in tax credits for production costs related to video and webtoon content as companies grow.Min Kyung-seol, head of the Innovation Growth Office at the Ministry of Finance, explained in a pre-briefing, “We will not simply cut off support when a business graduates from being a small enterprise. Instead, we will focus on providing more support to promising companies.”The financial support system will also be restructured according to the stages of business growth. The government plans to categorize businesses into types such as high-growth, stable growth, stagnation, and decline, and develop tailored support measures for each category. Special emphasis will be placed on supporting companies with growth potential.To this end, a pilot program will be conducted this year, with plans to expand the approach to a comprehensive inter-agency support program for small businesses starting in 2027. The goal is to prioritize 'growth promotion' over mere 'maintenance.'The government will also expand the 'Jump-Up Program' aimed at nurturing promising companies. This program will identify high-potential businesses and provide phased support for technology development, commercialization, international expansion, and financial assistance.Regulations based on company size will undergo a thorough review. The government will examine whether new regulations imposed on small businesses as they grow hinder investment and job creation, and will seek ways to improve these regulations.To strengthen startup support, the government will expand the 'Everyone's Startup' initiative and enhance the utilization of intellectual property (IP) to assist early-stage companies in commercializing their products. Support for youth entrepreneurship will also be pursued to create jobs for young people and foster new growth industries.For micro-enterprises, the government will focus on enhancing competitiveness and providing support for overcoming crises. It will assist promising micro-enterprises with lifestyle-related research and development (R&D) to improve products and services and strengthen brand competitiveness, while also enhancing support for those at risk of closure.Improvements to the Earned Income Tax Credit (EITC) system will be pursued to increase work incentives for low-income earners. The government plans to rationalize the income requirements for the EITC to reduce welfare gaps and expand support for working low-income individuals.To address labor market disparities, the government will promote the protection of workers' rights and improve employment and working hour systems, while seeking reasonable reforms based on surveys of temporary workers. 2026-07-14 11:48:00
  • Government to Tighten Loan Regulations and Reduce Housing-Loan Guarantees
    Government to Tighten Loan Regulations and Reduce Housing-Loan Guarantees The government is set to strengthen loan regulations and reduce the connection between real estate and finance to improve the structure of household funds concentrated in real estate. It plans to gradually decrease housing loan guarantees, excluding certain groups, and expand the scope of the Debt Service Ratio (DSR) application.The Ministry of Finance announced these measures as part of its '2026 Economic Growth Strategy' on July 14.Initially, the government will tighten loan regulations for speculative non-resident homeowners and gradually expand the DSR application range. The DSR is a system that determines loan limits based on the ratio of a borrower's annual income to their principal and interest repayment amounts. The government aims to enhance loan management focused on borrowers' repayment capabilities by broadening DSR application in loan assessments.Additionally, the government will strengthen the soundness management of high-risk mortgage loans. It is considering measures to increase the burden on financial companies for high-risk mortgage loans and impose additional capital reserve requirements. This is intended to reduce the financial sector's exposure to real estate-related risks.A Ministry official stated, "These measures are expected to block speculative loan demand and address regulatory blind spots," adding that they plan to explore institutional improvements, including increasing the burden of high-risk mortgages.Policy financing criteria and operational methods will also be revised. The income requirements for policy loans will be adjusted to use the median income standard instead of the previous method, rationalizing the support targets. The total management of policy loans will be strengthened to enhance the efficiency of resources.The government also plans to alleviate the phenomenon of excessive demand for policy financing during periods of rising market interest rates. To achieve this, it will flexibly adjust the interest rates of fund loans to maintain an appropriate interest rate difference between banks' own mortgage loans and policy financing.The housing loan guarantee system will be restructured. The government will gradually lower the guarantee ratio for borrowers, excluding young people without homes and vulnerable groups, to reduce the scale of guarantees. This action reflects concerns that housing loan guarantees lead to excessive leverage in rental markets.Furthermore, the government will strengthen the guarantee requirements for the rental deposit return guarantee system. It plans to gradually lower the rental price ratio requirement for guarantee enrollment and adjust the guarantee fee rates based on the actual occurrence rate of guarantee incidents. This aims to enhance the sustainability of the guarantee system.Policies to improve the capital market will also be pursued. The government will introduce a productive finance Individual Savings Account (ISA) to guide the flow of funds into productive finance and allow foreign investments in exchange-traded funds (ETFs). A fact book detailing the current state of productive finance will be regularly published to provide relevant information to the market.The government explained that these measures aim to alleviate the real estate-centered financial structure and encourage funds to flow into productive areas such as corporate investment and capital markets. It also plans to establish detailed systems to manage the increase in household debt stably while enhancing the soundness of the financial system.Yoo Byeong-hee, head of the Economic Policy Bureau at the Ministry of Finance, stated, "We are seeking institutional improvements to internalize social costs, such as increasing the burden on high-risk mortgages and imposing additional capital reserve requirements," adding that they are preparing to gradually reduce real estate policy loans and related guarantees. 2026-07-14 11:48:00
  • South Korea Aims for 100GW Renewable Energy by 2030 with K-GX Strategy
    South Korea Aims for 100GW Renewable Energy by 2030 with K-GX Strategy The South Korean government is pushing to achieve an early target of 100 gigawatts (GW) of renewable energy by 2030. The plan includes expanding the supply of carbon-free energy sources such as solar and wind power, and it aims to establish a 'Korean Green Transition (K-GX)' strategy by the end of the year to ensure a stable supply of carbon-free electricity for three major megaprojects, including semiconductor and artificial intelligence (AI) data centers.On July 14, the government discussed and announced these plans during a Cabinet meeting as part of its '2026 Economic Growth Strategy for the Second Half of the Year.' The government aims to reduce reliance on fossil fuels and secure new growth engines through the expansion of renewable energy and the cultivation of green industries. The K-GX strategy is expected to be unveiled in the third quarter of this year.The acceleration of renewable energy expansion is driven by the need to provide stable carbon-free electricity to the rapidly growing semiconductor and AI industries while enhancing energy security. This strategy also aims to respond to the restructuring of international supply chains and the tightening of carbon regulations, while fostering green industries as a new growth engine for future development.The government plans to focus on increasing the supply of renewable energy, particularly solar and wind power. Solar capacity is set to grow from 30.8 GW last year to 87 GW by 2030, while wind capacity will increase from 2.5 GW to 9 GW. This expansion aims to enhance the foundation for carbon-free electricity supply, diversify energy sources, and reduce dependence on fossil fuel imports, thereby increasing energy self-sufficiency.To lower the cost of renewable energy generation, the government will also pursue regulatory reforms. It is considering mandating large power producers to invest in renewable energy facilities to expand large-scale projects and achieve economies of scale. By increasing the size of power generation facilities, the government aims to reduce generation costs and encourage private investment to accelerate the deployment of renewable energy.Efforts to strengthen the competitiveness of green industries will also be intensified. The government plans to support the commercialization of key technologies in next-generation energy industries, including renewable energy, small modular reactors (SMRs), and electric vehicles, while expanding domestic production capabilities. Wind power technology will be advanced with ultra-large turbine innovations, and the electric vehicle sector will enhance the competitiveness of batteries and drive motors to secure supply chain stability and price competitiveness.Additionally, large-scale policy financing will support these initiatives. The government plans to provide 790 trillion won in policy financing for climate-related projects from 2026 to 2035, with more than half allocated to local areas and over 70% directed to small and medium-sized enterprises. Alongside this, a 'Second Basic Plan for Climate Change Response Technology Development (2027-2031)' will be established in September to actively promote the commercialization of carbon-free energy technologies and climate tech.* This article has been translated by AI. 2026-07-14 11:44:00
  • Government Establishes Future Response Fund to Support Youth and Growth Amid Economic Challenges
    Government Establishes Future Response Fund to Support Youth and Growth Amid Economic Challenges The government is set to establish a 'Future Response Fund' to focus on supporting youth and next-generation growth drivers, utilizing additional tax revenue generated from the recent semiconductor market boom.According to the Ministry of Finance's '2026 Second Half Economic Growth Strategy' announced on July 14, the government confirmed the creation of the Future Response Fund to effectively utilize excess tax revenue from corporate taxes due to strong semiconductor exports.The fund will target four key areas: enhancing youth independence and capabilities, expanding next-generation growth drivers, promoting balanced regional development, and innovating future-oriented education. Plans include strengthening support for youth housing and asset formation, as well as allocating significant budgets to national strategic technologies such as artificial intelligence (AI), biotechnology, and quantum technology.To proactively address potential economic downturns in the second half of the year, the government will intensively manage the execution of both central and local government finances, as well as education budgets.Notably, the government has significantly increased public investment and policy financing. The public investment target for this year has been raised from the previously planned 70 trillion won to 72 trillion won, aiming for an overachievement. This adjustment is part of a strategy to accelerate large-scale social overhead capital (SOC) projects and energy infrastructure expansion to support the private construction and manufacturing sectors.Policy financing will also be expanded to the largest level in history, increasing from the initially planned 633.7 trillion won to approximately 638.4 trillion won.Measures to alleviate inflation concerns have also been included. To provide tangible benefits to consumers, the government plans to issue discount vouchers for agricultural, livestock, and fishery products at a monthly level of 20 billion won. Additionally, a quota tariff will be applied to 49 essential food items that are highly dependent on imports and closely related to the livelihoods of ordinary citizens.In response to the ongoing high exchange rates that burden small and medium-sized enterprises (SMEs) importing raw materials, the government will swiftly provide 14.9 trillion won in emergency management funds to SMEs. Furthermore, the scope of support for 'exchange rate fluctuation insurance' will be expanded to alleviate concerns among small export and import businesses.The financial safety net for small business owners and self-employed individuals facing challenges due to persistently high interest rates will also be enhanced. The total supply of the 'Small Business Hope Dream Loan,' a key funding source for small business owners, will be doubled from the previous 1.5 trillion won to 3 trillion won.Additionally, the government will significantly expand the eligibility and scope of support for high-interest refinancing loans for small business owners who have borrowed at rates exceeding 7% from secondary financial institutions.Finally, to prevent risk factors from spreading throughout the macroeconomy, the government will strengthen inter-agency cooperation. A 'Comprehensive Market Monitoring Meeting' will be regularly held to comprehensively review macroeconomic trends, as well as developments in the financial and foreign exchange markets, and the real estate market linked to household debt.* This article has been translated by AI. 2026-07-14 11:44:00
  • Government Plans to Create 200,000 Jobs for Youth Amid AI Employment Challenges
    Government Plans to Create 200,000 Jobs for Youth Amid AI Employment Challenges The government is preparing a basic plan for employment stability in response to the employment shocks caused by the spread of artificial intelligence (AI). The initiative aims to minimize job disruptions during industrial transitions by expanding AI talent development and enhancing asset and housing support for young people.According to the '2026 Second Half Economic Growth Strategy' released on July 14, the government plans to establish an employment information hub for industrial transition to quickly assess trends and develop a Korean-style AI Exposure Index (K-AIOE) to analyze the impact of AI on various job roles.The government will also accelerate the training of AI and digital talent. The scale of advanced and digital vocational training will increase from 49,000 to 54,000 participants, and 41 KDT AI campuses will be operated to cultivate AI engineers.Support for small and medium-sized enterprises (SMEs) in AI transition will also be expanded. AI training coaches will provide tailored training based on company assessments, and an AI training diffusion center will support comprehensive education. Four physical AI testbeds will be established and gradually opened to local SMEs.The government will designate regions expected to be adversely affected by industrial transition as 'Just Transition Special Zones' to provide comprehensive support for businesses and small enterprises, worker retraining and reemployment, and the development of new industries. For companies facing temporary shutdowns, the requirements for receiving employment retention support funds will be relaxed, and a fast-track for hiring incentives will be introduced.Youth job initiatives will be actively pursued. The government plans to train over 200,000 young professionals by 2030, focusing on mega projects and advanced industries, and will provide support for employment and entrepreneurship.Kang Gi-ryong, Deputy Minister of Finance and Economy, stated, "Foundations for job creation in promising industries are being established, including three major mega projects. Based on this, we are preparing plans across various ministries to create 200,000 jobs, including for young job seekers, and we also plan to expand public sector employment."Support for youth asset formation will also be enhanced. A 'youth-type ISA' will be launched in the first half of next year, offering a 10% income deduction on contributions for young people with an annual salary of 75 million won or less, along with tax exemptions on interest and dividend income and increased contribution limits.Housing support will be strengthened as well. The government aims to supply over 400,000 public rental housing units for young people by 2030, with 60,000 of these being universally preferred public rental units located near transit hubs. The income threshold for the deposit return guarantee support program for young renters will also be relaxed to 50 million won annually.Support for newlyweds will be expanded. The government plans to improve income requirements for housing loans such as the Didirim, Beotimok, and Bogumjari loans in the second half of this year and will introduce special allocations for newborns in households with children under two years old to broaden their opportunities for housing applications.* This article has been translated by AI. 2026-07-14 11:44:00
  • Government to Announce Second Phase of Public Institution Relocation Plan
    Government to Announce Second Phase of Public Institution Relocation Plan The government is prioritizing regional growth as a key focus of its economic policy for the second half of the year, with plans to announce a detailed roadmap for the 'second phase of public institution relocation' within this timeframe. Additionally, it will provide significant support to businesses linked to the 5 poles 3 special growth engine through the enactment of the Mega Special Zone Act.According to the '2026 Economic Growth Strategy for the Second Half of the Year' released on July 14, the government plans to unveil the second phase of the public institution relocation plan this year and begin the relocation process next year, focusing on leading institutions. The plan aims to minimize the number of institutions remaining in the capital region while considering the principles of concentrated placement linked to the 5 poles 3 special growth strategy.To build the 5 poles 3 special growth engine, a key initiative of the Lee Jae-myung administration, the government will identify and select major industrial hubs by the third quarter of this year. Selected industries will receive comprehensive support through a three-pillar package that includes investment incentives (financial, fiscal, and regulatory), industrial ecosystem support (regulatory and technological), and business activity foundations (talent and infrastructure).The government also plans to enact the Mega Special Zone Act within the year, which will provide extensive regulatory exemptions and package support for investment companies linked to the 5 poles 3 special growth engine. The strategy includes plans for new designations of regulatory-free special zones that connect two or more local governments.Furthermore, over 40% of the total amount of the National Growth Fund will be invested in local areas to enhance funding and attract investment for regional economies.In addition to financial support, measures will be implemented to attract private capital and talent to local areas through tax benefits. Companies investing in growth engine sectors will receive substantial investment incentives, while workers in those regions will benefit from a 'local preferential tax package' aimed at improving income stability and living conditions.Next year, the number of local preferential projects will be significantly increased from the seven currently in place, and a local preferential index will be developed to strengthen the growth foundation of regions. To achieve this, the government plans to identify local preferential projects by the end of the second half of this year.The government will also lower barriers for local companies in the public procurement market. Through a reorganization of the national contract system led by the Public Procurement Service, companies located in areas experiencing population decline will receive preferential points in price evaluations. Finally, the government aims to complete improvements to related systems, such as promoting a policy for the prioritized purchase of products from local small and medium-sized enterprises, by the end of the second half of the year.Lee Hyung-il, First Deputy Minister of Finance, stated, 'We will do our utmost to ensure that regional growth can be a pillar for the rebound of potential growth rates. By the third quarter, we will select growth engines for the 5 poles 3 special regions and enact the Mega Special Zone Act to provide extensive support for investment companies linked to these engines within the year.'* This article has been translated by AI. 2026-07-14 11:44:00
  • Government Plans to Shift Supply Chains to Domestic Production Amid Economic Security Concerns
    Government Plans to Shift Supply Chains to Domestic Production Amid Economic Security Concerns Amid increasing supply chain uncertainties due to the Middle East conflict, the government is encouraging domestic production of economically secure items. The strategy focuses on expanding tax deductions for domestically produced items of high importance and increasing stockpiling and overseas investments for items that are difficult to produce locally. For items with a high dependency on specific countries, the government will fully support the costs of alternative imports with low-interest loans.On July 14, the government unveiled its "2026 Second Half Economic Growth Strategy" during a Cabinet meeting. The plan categorizes supply chain responses into four levels: items that can be produced domestically, items that are difficult to produce but can be stockpiled, items that cannot be produced or stockpiled domestically, and items that cannot be produced or stockpiled either domestically or internationally.For economically secure items that can be produced domestically, a tax deduction will be introduced. This deduction will be based on the production and sales volume of strategically important items, calculated by multiplying an appropriate unit price by the quantity produced, which will then be deducted from corporate or income taxes.Separate support measures are being considered for companies that cannot benefit from tax incentives due to initial production losses. Domestic production subsidies for high-risk economically secure items, which are less cost-competitive than foreign products but essential for supply chain stability, will continue until the first half of next year.The government also plans to expand the recycling and reprocessing of critical minerals. To increase the recycling rate of critical minerals from the current 7% to 20% by 2030, efforts will be made to promote the independence of the urban mining industry. Standards will be improved to prioritize the separation and recovery of waste parts containing critical minerals during the recycling of electric vehicles and electronic products, and permanent magnets will be recognized as recyclable resources. A pilot project supporting the mass recycling of rare earth elements will also be launched with a budget of 8.08 billion won.For essential goods that are difficult to produce domestically, the government will pursue both new stockpiling and the expansion of existing stockpiles. Research will begin on new stockpiling methods for urea used in fertilizers, and the necessity and operational methods for stockpiling naphtha will be reviewed. The total stockpile of major crude oil types will be expanded in line with economic scale, and the stockpile targets for six non-ferrous metals will be reassessed by August to establish a stockpiling plan for 2027-2031.Stockpiling infrastructure will also be enhanced. A dedicated stockpiling facility for critical minerals will be established by 2028 at the Saemangeum National Industrial Complex, consisting of six general warehouses and four specialized warehouses. Additionally, the government plans to expand oil stockpiling facilities to hold over 20 million barrels and increase international joint stockpiling with major oil-producing countries like Saudi Arabia and the United Arab Emirates.For items like vehicle urea that require inventory circulation, a new stockpiling model will be piloted next month, allowing companies that agree to annual usage amounts to purchase government-held stock. In the event of a supply chain crisis, government stockpiles will be prioritized for these contracted companies.For items that cannot be produced or stockpiled domestically, the government will secure overseas production capabilities. Starting in 2027, investments in overseas supply chains for urea and critical minerals will be increased, and support will be provided for overseas resource development, processing, and securing long-term supply negotiation rights through sovereign wealth funds, policy funds, and development finance.For items with over 80% dependency on specific countries, the government will provide low-interest loans for alternative import costs through a supply chain stabilization fund. The support limit will be increased from 80-90% to 100%, with a preferential interest rate of up to 2.3 percentage points. The government is also considering revising the oil import tax refund system to develop refining technology for medium and heavy crude oil from non-Middle Eastern sources and to compensate for additional freight costs incurred.* This article has been translated by AI. 2026-07-14 11:40:00