Kang Seok-hoon, Chairman of KDB, "Active Response Needed to Changes in Economic Environment"

Lecture on "Economic Environment Changes and the New Role of Korea Development Bank" at the 4th Niche Hour Forum
"We Will Take Responsibility for 1% Point of South Korea's GDP Growth Rate"

Kang Seok-hoon, President of the Korea Development Bank, is giving a lecture on the topic "Changes in the Economic Environment and the New Role of the Korea Development Bank" at the "4th KIAF Niche Hour Forum" held on the 27th at the Korea Automobile Manufacturers Association in Seocho-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Yoo Hyun-seok] "South Korea is facing crises such as low growth, declining investment and productivity, and aging population, and active response to changes in the economic environment is required for economic revitalization and development as a global pivotal country."

Kang Seok-hoon, Chairman of Korea Development Bank (KDB), stated this at the 4th Niche Hour Forum hosted by the Korea Industrial Alliance Forum (KIAF) on the 27th at the Korea Automobile Manufacturers Association in Seocho-gu, Seoul. He said, "The era of economic security, which began with the US-China hegemony competition, demands a restructuring of the economic system centered on deglobalization and value alliances. South Korea must respond by reducing dependence on China and securing supply chains and technological sovereignty within value alliances."

The 'Niche Hour Forum' is an event held during morning, lunch, or evening breaks to listen to policy issues and hear opinions from policy authorities on various industry issues, facilitating communication between the industrial sector and policy authorities. This Niche Hour Forum was held under the theme of 'Changes in the Economic Environment and the New Role of Korea Development Bank,' inviting Kang Seok-hoon, Chairman of KDB. Industry figures from automotive, steel, engineering, textiles, semiconductors, and other sectors attended.

Chairman Kang likened the Korean economy to the end of 'spring days.' After a period of high growth, it has now entered 'winter,' which can be described as low growth. He said, "I believe that if the downward trend in growth rate is not reversed, there will be no tomorrow," adding, "This is a time when dynamic growth of the private sector is necessary for South Korea's leap forward."

He emphasized that overcoming this requires the spread and development of new industries. He said, "The advent of the era of industrial transformation is both a challenge involving large-scale funds and an opportunity to create new growth engines. Through industrial convergence driven by new technologies, the expansion and development of the industrial ecosystem can be induced." He stressed, "To this end, carbon-neutral industries such as green mobility, secondary batteries, and green hydrogen, as well as digital infrastructure and digital transformation industries like non-face-to-face and hyper-connectivity, must be fostered, and policy finance should be utilized to respond to transition demands."

Chairman Kang emphasized that the future competitiveness of industries with a super-gap depends on the reorganization of industrial supply chains and responses to major countries' industrial protection policies. He stated that securing technological sovereignty through core technologies is essential for the sustainable growth of new industries. He also noted that traditional manufacturing remains the driving force of the national economy but faces the challenge of transitioning to low-carbon processes through long-term, large-scale investments due to being a major source of carbon emissions in the industrial sector.

Kang highlighted the role of KDB as the 'guardian of supply chain security,' 'stepping stone for new industry development,' and 'partner in industrial transformation.' He explained that KDB is the only bank with a dedicated technology analysis department to secure South Korea's supply chains. Through this, KDB is accumulating supply chain data for 20 major industries, conducting additional analysis on green technologies, and has begun building related IT systems, focusing on supply chain data analysis.

Additionally, based on data, KDB is responsible for national industrial supply chain support for small and medium-sized parts, materials, and equipment companies, reshoring companies, and overseas investment companies for friendly reshoring. In particular, it supports the leap forward of the Korean economy through policy finance supply for super-gap industries. To this end, it provides patient and venture capital as well as long-term, large-scale funds to enable step-by-step growth from development-stage technologies and promising new industries to super-gap industries.

As an example of this, Chairman Kang explained ongoing measures by KDB. He said, "We are planning the 'Korea Economic Leap Forward Project,' which supports major super-gap advanced strategic industries by mobilizing all of KDB's investment banking (IB) capabilities." He added, "As the first project, we will support the semiconductor industry with 10 trillion won each for the fabless and foundry sectors, 10 trillion won for parts, materials, and equipment companies, and 10 trillion won for memory semiconductors, totaling 30 trillion won over the next five years."

Along with this, Chairman Kang emphasized that KDB will actively supply funds where policy finance support is needed to help South Korea's growth. He said, "In response to large-scale industrial transformation demands, we are actively supplying funds to sectors requiring policy finance support, contributing to companies' digital transformation and the digitalization of urban and industrial infrastructure such as smart cities and smart industrial complexes, and actively investing in companies' carbon neutrality and energy transition, fulfilling the role of the national climate finance bank." He stressed, "As South Korea's representative policy finance institution, KDB will take responsibility for 1 percentage point of South Korea's GDP growth rate."