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South Korea investment grows together with China
(China Daily)
Updated: 2008-06-23 14:57 Statistics from the Ministry of Commerce shows China's exports to South Korea hit $56.14 billion in 2007, up 26.1 percent from a year earlier while the country's imports from South Korea stood at $103.75 billion, up 15.6 percent. The relationship between the two countries has also been highly promoted. China and South Korea last month agreed to upgrade their "comprehensive and cooperative partnership" to "strategic cooperative partnership" during the latest summit talks between Chinese President Hu Jintao and his South Korean counterpart Lee Myung-bak. "I think a strategic cooperative partnership means any decision by one side will impose a remarkable impact on the other," Woo explains. At the earlier stage of their investment in China, South Korean businesses, like many other foreign investors, focused on the manufacturing industry in a bid to take advantage of the labor and resources in the country. But Woo says they should adapt themselves to the changing circumstances. However, differentiating themselves from other players does not mean they have to give up the manufacturing industry, Woo says. South Korean business people should take the business in China as a "cause" rather than simply taking it as a manufacturing facility. For example, he explains, LG set up a joint venture in Shenyang, Liaoning Province in 1994, producing CRT televisions for both domestic and overseas markets. While a number of Chinese people are replacing their CRT televisions with flat-screen TVs, the South Korean company hasn't shut the factory down. Instead, it has turned to developing markets abroad, such as Central and South America, India, East Europe and East Africa. "Now it does exports only and keep a quite good profit margin," Woo says. He says the company had spent a lot in training employees in the Shenyang factory, which helps its shift to new overseas markets. As the newly elected chairman of the South Korea Chamber of Commerce, Woo suggests that both governments speed up reaching a free trade agreement (FTA). "The two countries should ink a free trade pact as soon as possible because such a pact will help sharpen the competitive edge of both countries, by opening the markets to each other and sharing the resources," he explains. The fifth round of joint study on a possible FTA was held in Beijing between June 11 and 13 with officials discussing a feasibility study that began in November 2006. "In a long run, if we can form a free trade system among China, Japan and South Korea. It could be as influential as the North American Free Trade Area and the European Union," Woo says. (For more biz stories, please visit Industries)
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