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A view of the Daesan Petrochemical Complex in Seosan, South Chungcheong Province. / Source: Seosan City

The South Korean government has designated Seosan in South Chungcheong Province and Pohang in North Gyeongsang Province as industrial pre-emptive crisis response zones, pledging two years of financial and policy support to help revive their struggling petrochemical and steel industries.

The Ministry of Trade, Industry and Energy announced Thursday that the designation will be effective until August 27, 2027. Both cities have faced mounting difficulties—Seosan due to a slump in petrochemicals and Pohang due to weakening steel demand—exacerbated by China’s flood of low-cost supplies and a prolonged global economic slowdown.

Under the plan, companies will receive low-interest loans through emergency stabilization funds: up to 1 billion won ($740,000) from the Korea SMEs and Startups Agency and up to 70 million won from the Small Enterprise and Market Service. The government will also expand local investment promotion subsidies for large-scale facilities from the current 4–9 percent to as high as 12 percent.

In addition, a newly created “Regional Industrial Crisis Response” program in the second supplementary budget will provide interest subsidies to ease corporate loan burdens and deliver tailored measures such as workforce training to enhance competitiveness.

A ministry official said the government intends to actively reflect projects such as research and development, management consulting, and employment stabilization in future budgets, adding, “We will continue to expand support measures beyond 2026 to help local industries overcome the downturn.”