Global supply chains are no longer just about efficiency; they are about survival. President Lee Jae-myung’s remarks in Vietnam calling for stronger cooperation on rare earths and urea solution supply chains were more than an economic message. They underscored South Korea’s industrial vulnerabilities and pointed to how the country must adapt to a new global order. The challenge now is not the direction but the design. The question has shifted from where to invest to how to build a resilient supply chain.
South Korea already saw how damaging supply disruptions can be during the 2021 urea-solution shortage. Heavy reliance on a single country lowered costs in normal times, but in a crisis it became a shock that could paralyze entire industries. Since then, “diversifying supply chains” has become a central policy slogan. But it has too often remained a declaration. The task now is to build a working structure.
Vietnam is clearly an important partner in that effort. But the strategy must avoid turning Vietnam from an alternative into a new single point of dependence. The goal is not dispersion for its own sake, but diversification that remains manageable. Excluding one country entirely or concentrating too heavily on another both carry risks. A layered approach is needed: use Vietnam as a key base for manufacturing and assembly, while diversifying rare-earth sourcing to Australia and Africa and spreading urea-solution feedstock supplies across the Middle East and Southeast Asia. The design should anchor on one hub while distributing risk across multiple pillars.
Speed matters as well. Countries are racing to reshape supply chains, and delays can mean lost opportunities. Still, not everything can be solved quickly. Issues such as technology transfer require long-term trust and negotiation. That argues for a phased strategy: first, secure the physical base through relocation of production and expanded investment; second, raise capabilities through joint research and development and broader technology cooperation. Speed and sustainability are not opposites, but priorities that must be sequenced.
Risk is the bigger test. Cooperation on energy infrastructure such as nuclear power plants and LNG facilities can be central to supply stability, but it also brings heavy capital demands and geopolitical exposure. Leaving that burden solely to private companies is unrealistic. If supply chains are treated as a national strategy, the state must share part of the risk. Tools such as policy financing, export credit guarantees and long-term purchase contracts can reduce corporate burdens and strengthen incentives. Companies pursue returns; governments secure stability. Clear roles are needed for the system to work.
Governance will determine whether the overhaul moves beyond rhetoric. To make supply-chain restructuring enforceable and trackable, institutional mechanisms are needed, including a control tower to coordinate strategy and a national fund to secure strategic resources. Major projects should be pursued jointly by the public and private sectors, alongside a system to evaluate results and make corrections. The aim is to ensure investment plans lead to execution.
The role of business must also evolve. Lee Jae-yong, Koo Kwang-mo and Chey Tae-won are already key players in global supply chains, and their investments increasingly intersect with national strategy. But companies cannot absorb all risks alone. Supply chains become more stable when government strategy and corporate execution align.
South Korea now faces a choice between maintaining an efficiency-first model and shifting to a structure centered on stability and strategy. The argument is that even if costs rise, building a more secure supply chain offers greater long-term benefit and affects national sustainability.
The Vietnam trip is only a starting point. What matters is follow-through. Supply chains are not rebuilt by declarations, but by design, investment and accountable execution. A strategy that balances concentration with diversification, matches speed with sustainability through phased steps, and shares risk between government and business is presented as essential — and urgent.
* This article has been translated by AI.
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