3rd Industry and Corporate Crisis Response Team Meeting and 5th Post-Corona Industry Strategy Dialogue
Government: "Promote Expansion of Domestic Production Led by Major Fashion Companies and Advancement of Chemical Fiber Structure"
Industry: "Expand Emergency Management Stabilization Funds and Employment Retention Support, Add Special Employment Support Sectors"
[Asia Economy Reporter Moon Chaeseok] The government announced plans to apply the Corporate Vitality Act to transform the textile and fashion industry into a high value-added sector. The industry requested an expansion of emergency management stabilization funds and employment retention subsidies, as well as the designation of the textile and fashion industry as a special employment support sector.
On the 20th, the Ministry of Trade, Industry and Energy held the "3rd Industry and Corporate Crisis Response Team Meeting" and the "5th Post-COVID Industrial Strategy Dialogue" at 10 a.m. at the Korea Chamber of Commerce and Industry in Seoul, chaired by Minister Sung Yun-mo.
The meeting was attended by government officials from the Ministry of Strategy and Finance, Ministry of National Defense, Ministry of Environment, Ministry of Employment and Labor, Ministry of SMEs and Startups, Public Procurement Service, as well as corporate representatives including Huvis, Daehan Textile, Hanshin Special Processing, Sungkwang, Hansol Textile, Giordano, and Musinsa.
The industry has been pushed into a consumption cliff due to decreased global demand and supply chain disruptions caused by the COVID-19 pandemic. Domestic original equipment manufacturing (OEM) clothing vendors have recently faced difficulties such as order cancellations from global buyers, sharp declines in new orders, and delays in payment, leading to liquidity crises. Exports in March and last month decreased by 8.9% and 35.3% respectively compared to the previous year. Declining domestic factory operating rates and employment reductions are also burdensome.
Minister Sung stated that the government will actively support resolving the difficulties faced by the industry, strengthening solidarity and cooperation between demand and supply companies, and advancing the industrial structure to enhance competitiveness.
First, during the "Korea Together Sale" from June 26 to July 10, a "Korea Fashion Market" will be held to stimulate consumption. About 50 fashion companies will participate in the event. Early orders and prepayments in the defense and public sectors will be expanded to increase demand. The government will continuously monitor whether liquidity support programs are well matched with on-site demand.
The "Cheonri (Thousand-Mile) Project" will be implemented to expand domestic production through the use of domestic materials and sewing. A win-win cooperation agreement will be signed between demand and supply companies in the textile and fashion sectors, including yarn, fabric, sewing, and fashion industries. The government aims to strengthen the competitiveness of the domestic materials industry and activate smart sewing factories by spreading cooperation cases such as the "Cheonri Project."
The industrial structure, currently focused on low value-added and general-purpose products, will be shifted to focus on high value-added and industrial products. Using the Corporate Vitality Act and other measures, the government will actively support business transformation and industry restructuring. Earlier on the 13th, the Ministry of Trade, Industry and Energy revised the Corporate Vitality Act to provide benefits not only to companies in oversupplied industries but also to companies entering new industries or located in industrial crisis areas.
To this end, support for core technology development and commercialization of industrial textiles such as high-performance clothing and carbon fiber will be expanded. An eco-friendly industrial ecosystem including recycled fibers and clean factories will be established. The government plans to proactively respond to the new era of clothing services through "digital transformation," such as ICT convergence personalized clothing and 3D virtual clothing solutions.
Companies attending the meeting proposed expanding financial and employment support, easing environmental regulations, stimulating domestic demand, and supporting the establishment of online and digital infrastructure and workforce training in preparation for the post-COVID era. In particular, they requested an expansion of emergency management stabilization funds and employment retention subsidies to resolve liquidity crises, and the additional designation of the textile and fashion industry as a special employment support sector.
Furthermore, they suggested stimulating domestic demand through early execution of government procurement and early hosting of large-scale consumption activation events, as well as supporting the establishment of online platform infrastructure and training digital export experts by utilizing retirees.
Relevant ministries, including the Ministry of Trade, Industry and Energy, listened to the industry's difficulties and proposals and decided to actively review support measures for overcoming the crisis on a whole-of-government basis.
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