The government is pushing for financial and fiscal support amounting to 55 trillion won+alpha over the next three years for 'supply chain stabilization'. The government has set a target to reduce the dependence on specific countries for economic security items to below 50% by 2030.
Relevant ministries announced the '1st Basic Plan for Supply Chain Stabilization (2025-2027)' on the 19th. This is the first three-year basic plan established under the Supply Chain Stabilization Support Basic Law for Economic Security, enacted on Jun. 27. The government plans to lower the dependency on specific countries for economic security items, which was at 70% last year, to 60% by 2027 and below 50% by 2030.
◇ Diversifying stockpiling methods including other corporations and the private sector… Tax benefits for domestic production
To this end, a 'public stockpile integrated management system' will be established as a means to immediately respond to supply chain crises. Plans include diversifying stockpiling methods such as 'third-party stockpiling', where the Public Procurement Service purchases elements that are difficult for long-term storage and demand corporations store them, rotating inventory to maintain stockpile levels. Incentive systems will also be devised to support storage fees, inventory management facility and system establishment expenses, and to expand voluntary stockpiling by the private sector.
A 'supply chain stabilization support program' (tentative name) will also be introduced to support domestic production, import diversification, and stockpiling for the stability of supply and demand for specific high-risk economic security items. It provides short-term price difference support when importing items with high dependency on specific countries like elements from third countries, and supports the promotion of domestic production and purchase when domestic production facilities exist but have economic inferiority. An 'emergency procurement fund' for emergency purchases in case of a supply chain crisis will also be newly supported.
Support for equity investment in foreign corporations producing economic security items and services will also be strengthened. The plan includes adding 'economic security-related items and services' to the tax credit targets for corporate tax when acquiring equity or taking over businesses of foreign corporations. Tax incentive enhancement will be reviewed for overseas resource development of core minerals needed in key advanced industry fields such as semiconductors and secondary batteries.
Support to increase domestic production will also be expanded. During the new construction and expansion of domestic factories related to economic security items and services, subsidies for foreign and local investments will be provided, and tax support will be considered for facility investments related to domestic production.
The government will also systematize the grading criteria for over 300 economic security items and regularly inspect them on a quarterly, semi-annual, and annual basis according to risk grades. It plans to strengthen the sharing of supply chain-related information by linking early warning systems (EWS) established by various institutions.
◇ Investing 25 trillion won in supply chain R&D over three years… Establishing a 1 trillion won supply chain private equity fund
Support exceeding 25 trillion won will be provided for research and development (R&D) of core technologies in supply chains and economic security until 2027, and the supply chain stabilization fund will be expanded to a scale of 30 trillion won over the next three years. Annual funding resources of 10 trillion won will also be secured through guarantees from supply chain bond nations.
A 1 trillion won supply chain specialized private equity fund will also be established in the first half of next year. The funding resources will consist of 100 billion won from the supply chain fund, 100 billion won supported by the Export-Import Bank, and 800 billion won from private investments.
The operation period for the special accounts for materials, components, and equipment (so-called 'So-Bu-Jang') will be extended until 2029. The scale of the accounts will be gradually expanded. At the same time, the special accounts, which are centered on government grants and subsidies, and the supply chain fund, which is centered on loans and equity investment, will be linked at different stages of projects.
A strategy to link official development assistance (ODA) with supply chain policies will also be promoted. When selecting key partner countries, the government will consider the development level of the recipient country, the implementation environment of ODA, as well as 'the possibility of cooperation in areas like supply chains and economic security'. Plans also include utilizing trust funds of international financial institutions when establishing supply chain-strengthening policies for developing countries.