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Government to commit $35.7B in policy financing to stabilize supply chains

Published: 20 Aug. 2025, 19:02 Updated: 20 Aug. 2025, 19:59

Export-bound containers are stacked at Pyeongtaek Port in Gyeonggi on Aug. 17. [NEWS1]

The Korean government will commit almost 50 trillion won ($35.7 billion) this year to strengthening supply chains, from securing raw materials to final production, aiming to reduce risks from shifting trade conditions and a global restructuring of supply networks.

The government made the announcement on Wednesday after the fifth meeting of the Supply Chain Stabilization Committee, where ministries jointly unveiled their plan for “comprehensive financial support across the supply chain.”

Authorities restructured the list of economic security items and services. Newly designated items include semiconductors, artificial intelligence and secondary batteries, as well as key minerals, aerospace, defense and essential consumer goods. Services, which had been limited to shipping and air transport, now extend broadly across logistics.

Deputy Prime Minister and Finance Minister Koo Yun-cheol said the government will “actively push for domestic production of critical items, diversify import sources and expand reserves.”

The measures include tailored financial support for each stage of the supply chain: upstream, midstream and downstream.

For raw materials and mineral resources, the government will expand funding for overseas resource development projects. Through an interagency council for critical minerals investment, relevant ministries will identify promising projects and provide financing packages that combine loans, investments and guarantees. The state will lend up to 50 percent of development costs and reduce the repayment burden by up to 80 percent in the event of project failure.

Trade containers are stacked at Pyeongtaek Port in Gyeonggi on Aug. 18. [YONHAP]

At the distribution stage, the government will expand the scope of the Supply Chain Stabilization Fund to focus on logistics infrastructure. Using shipping and logistics policy funds, it plans to increase the number of joint overseas logistics centers from six this year to 40 by 2032. A task force including both public and private players will secure stakes or operating rights at major global ports, with public funds made available for support.

In the production stage, the government will encourage companies to reduce dependence on specific countries. It will subsidize the price gap when sourcing from alternative suppliers and expand investment in refining facilities for rare minerals overseas. For domestic facilities that struggle to remain viable due to low profitability, the government will share risks through various mechanisms to keep production running.

The government package includes 45.8 trillion won in policy funds, with 10 trillion won from the Supply Chain Stabilization Fund, 13.3 trillion won from the Export-Import Bank of Korea and 18 trillion won from the Korea Development Bank. These funds will be offered at low interest rates. The Korea Credit Guarantee Fund and the Korea Technology Finance Corporation will provide an additional 4.4 trillion won in guarantees at preferential rates for supply chain-related firms.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY JANG WON-SEOK [[email protected]]