Kwon Hyangyop Proposes Comprehensive Overhaul of Industrial Crisis Response with Amendment to Regional Industrial Crisis Response Act

Introducing a fast-track from "Preemptive Area" to "Special Area"
Establishing a legal basis for follow-up support after Special Area designation expires

Democratic Party of Korea National Assembly member Kwon Hyangyop (Suncheon-Gwangyang-Gokseong-Gurye, South Jeolla Province) announced on the 26th that she has sponsored the “Partial Amendment to the Special Act on Regional Industrial Crisis Response and Regional Economic Recovery” (the Amendment to the Regional Industrial Crisis Response Act) to fundamentally overhaul the response system for regional industrial crises.

Under the current law, in order to respond to the deterioration of regional industries and economic conditions, the Ministry of Trade, Industry and Energy (hereinafter referred to as the MOTIE) may designate an Industrial Crisis Preemptive Response Area (hereinafter referred to as a Preemptive Area) or an Industrial Crisis Response Special Area (hereinafter referred to as a Special Area) upon application by local governments.

However, even when an industrial crisis in a Preemptive Area further intensifies, there is no procedure in place to swiftly move to the next stage as a Special Area, and criticism has continued that this causes the government to miss the golden time for responding to industrial crises.

In addition, it has been pointed out that the lack of a sufficient legal basis for necessary follow-up support after the expiration of a Special Area designation undermines the resilience of regional industries.

Furthermore, while the current law stipulates support measures for industrial crisis areas, it lacks provisions that mandate cooperation and assistance from relevant ministries and agencies.

Accordingly, this Amendment aims to completely revamp the regional industrial crisis response system and fill institutional gaps. Its key elements include establishing a fast-track procedure for conversion from a Preemptive Area to a Special Area, creating a follow-up support system after the expiration of a Special Area designation, and newly stipulating provisions on cooperation by relevant ministries for projects that request support for industrial crisis areas.

Meanwhile, in November last year, the MOTIE judged that preemptive action was needed due to concerns over the deterioration of the steel industry and designated Gwangyang City as a Preemptive Area for two years.

Accordingly, the government plans to provide support such as emergency business stabilization funds, preferential treatment in local investment promotion subsidies, and policy finance support for small and medium-sized enterprises. If the bill passes, conversion from a Preemptive Area to a Special Area will become possible, and support from relevant ministries is also expected to proceed more smoothly.

Assemblywoman Kwon Hyangyop stressed, “Our regional industries are facing a compounded crisis due to global overcapacity originating in China and tariff shocks originating in the United States. If we miss the golden time now, the very industrial base could collapse. Through a comprehensive overhaul of the system, we must secure the golden time for responding to regional industrial crises and restore the competitiveness of regional economies.”

This content was produced with the assistance of AI translation services.