South Korea announces supply chain diversification strategy to reduce dependence on China

According to Businesskorea, the South Korean Ministry of Trade, Industry and Energy has recently released a supply chain diversification strategy to reduce dependence on China and reduce supply chain risks.

The source pointed out that the content of the strategy is that the South Korean government plans to assist Korean companies currently doing business in China to relocate, while increasing their return assistance. In addition, South Korea will strengthen cooperation with ASEAN and Latin America in supply chain and resource procurement, including Indonesia, Thailand, Vietnam, Chile, Argentina, Brazil, Mexico, etc.

According to reports, South Korea's high dependence on China's supply chain has caused multiple problems. A sudden drop in supply from Chinese factories two years ago severely affected South Korean automakers.

Affected by multiple factors such as the new crown epidemic and inflation, countries around the world are actively building supply chain localization. The United States introduced the "Inflation Reduction Act" in an attempt to limit the use of Chinese electric vehicle materials and components. Yesterday, EU member states agreed to invest 45 billion euros ($46.6 billion) in developing the chip industry, aiming to support local chip supply chains and reduce reliance on U.S. and Asian manufacturers.