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South Korea struggles to lure factories home from China and Vietnam
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Posttime:2020-09-22
SOUTH Korea is struggling to lure companies with operations overseas back to the country despite expanded incentives aimed at helping local factories compete with China and South-East Asia, reports London's Financial Times.
SME Minister Park Young-sun said the government was redoubling efforts to encourage companies to return home, as the country grapples with rising unemployment and slower growth from coronavirus.
"It remains to be seen if the reshoring trend will accelerate but I think our incentives will influence the decisions of high value-added manufacturers," said Mr Park.
A recent survey showed that only eight per cent of 200 South Korean SMEs with operations in China and Vietnam said they were willing to return home, according to local industry association K-Biz.
"Despite the changed environment amid the pandemic, it is hard to expect substantial progress with reshoring, unless there are stronger incentives for relocation to offset the sunk cost from offshoring, said JP Morgan economist Park Seok-gil.
source:Schednet
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