COVID19 pandemic requires many countries, including Korea, toadopt a new approach to solve the supply chain problem. One of themost important strategies for Korea in the recent rapidly changingtrade environment is building a stable supply chain in the corestrategic field. In that context, Korea is implementing two importantstrategies. One is to reduce Korean companies’ dependence on China,a major economic partner, and the other is to deepen economicrelations with major countries to build supply chains.Under the trend of technological competition and supply chainreorganization arising from the U.S.-China conflict, it is necessary toanticipate changes in GVC and come up with countermeasures.

Conflict between the U.S. and China is a main factor that limit themovement of products, technology, and resources on GVC, leadingtoweakening of GVC. Weakening GVC and restrictions on free trade dueto the U.S.-China conflict are also a major threat to Korea. This studypredicts the impact of the US-China supply chain reorganization onKorea and future GVC changes after COVID-19, and derives policyimplications for Korea. The purpose of this study is to identify changesin trade patterns between Korea, China, U.S. in industries or itemssubject to the U.S.-China conflict from a global value chainperspective and to seek countermeasures on our industries.

The main content of the study is to analyze trade trends in the fourmajor industries before and after the COVID19 pandemic. Theproduction network of industries and items subject to supply chainreorganization is analyzed from the perspective of the value chain. Inparticular, the changes in trade patterns and GVC effects of theseindustries are identified, and the impact on Korean industries isanalyzed from various aspects. In addition, the possibility of structuralchanges in GVC due to the U.S.-China conflict is discussed throughvarious factors and issues. It identifies the impact on trade and industrythrough a survey of companies included in the four major industries.

Survey results are utilized to establish countermeasures. We alsoanalyze the impact on corporate performance caused by changes insupply chain management empirically. It presents explicit results onhow supply chain management by industry affects corporateperformance, focusing on the four major industries closely related tosupply chain management.As a result of investigating the types that companies are consideringin relation to the reorganization of the supply chain, 89.8% ofcompanies said they would “keep their domestic or overseas
production facilities as they are.” According to the survey results, morethan half of the companies answered that they were negatively affectedin the export sector when there are changes in the supply chain. Only1.4% of the companies said they were preparing countermeasures tocope with the reorganization of the supply chain, indicating that mostof the companies had no countermeasures for the reorganization ofthe supply chain. As a result of evaluating the effectiveness of policymeasures, the proportion of positive responses in most items exceeded80%. When evaluating the effectiveness of measures to strengthen thecompetitiveness of companies, the proportion of positive responses inmost items was quite high.

Looking at the analysis results of the effect of supply chainmanagement on corporate performance, it was confirmed that themanagement of supply chain had a positive effect on corporateperformance in the mineral industry. It can be seen that the impact ofthe supply chain on corporate performance after COVID-19 still has apositive effect, but the magnitude of the impact decreasessignificantly. In the semiconductor industry, supply chain managementwas found to have a positive effect on corporate performance. Overall,results similar to those of the mineral industry were obtained. In thecase of drugs, it was found that the effect of supply chain managementhad a positive effect only before COVID19 period, but no effectafterwards. It was confirmed that battery supply chain managementhad a positive effect on corporate performance. However, it was foundthat the influence of the supply chain was relatively small in2019~2020