Push for Reshoring
The South Korean government is revising laws and increasing incentives to ensure that more large South Korean companies return to their home country.
After the Act on Assistance to Korean Off-shore Enterprises in Repatriation was implemented in 2013, only 68 South Korean companies did so between 2014 and 2019 and the number stood at four in 2015 and 2017 each. Besides, the 68 companies include 67 non-large companies and Hyundai Mobis is the only large company in the group. It opened a green car parts manufacturing plant in Ulsan City in as recently as August last year.
On the other hand, more than 3,300 U.S. companies in a wide variety of industries returned to their home country between 2010 and 2018 and a large number of Japanese companies such as leading automakers and electronics manufacturers did so during the same period. In contrast, labor-intensive companies such as textile and shoe manufacturers constituted most of the 68 South Korean companies.
Under the circumstances, many experts mentioned the necessity of retrieving large companies in that the reshoring can be accompanied by a very large number of smaller companies and can be of great help in dealing with Japan’s export curbs and the spread of COVID-19. According to them, reshoring of just 25 percent of one mobile phone manufacturing plant of Samsung Electronics can lead to an increase in domestic production of 12.7 trillion won and 35,000 new jobs.