Korean companies are currently pioneering the so-called potential wave of withdrawal from the Chinese market because of inconveniences related to increased taxes, the trade war and the “no Covid-19” policy.
Follow Bloombergretail giant Lotte Group is in the final stages of closing its China headquarters and focusing its attention on other Asian markets.
Cosmetics group Amorepacific Group (headquartered in Seoul) was also forced to close more than 1,000 stores as Covid-19-related disruptions dented consumer confidence in China.
Meanwhile, South Korean manufacturing giants, such as Samsung Display Co and LG Electronics Inc, closed several factories in China because of increased competitive pressure from domestic rivals, as well as because difficulties coming from this country’s continuous and rapid blockade order.
According to Bloomberg, retail giant Lotte Group is in the final stages of closing its China headquarters and focusing on other Asian markets. Photo: Reuters
“China is no longer a land of opportunity for Korean businesses. China’s no-Covid-19 policy is too harsh while Chinese companies are catching up with Korean companies. It would be better. for Korean companies if they give up their fantasy of making money in China,” said Scott Kim, who served as director of the Shanghai and Beijing office at Kotra, a unit of the Korean Ministry of Commerce, confirm.
In a survey conducted by the Federation of Korean Industries late last year, about 86% of 131 Korean companies said business conditions in China had deteriorated over the past decade.
Many reasons were given by them, including the US-China trade war, stricter environmental regulations and higher production costs.
Foreign businesses face difficulties because of China’s “no Covid-19” policy. Photo: Reuters
Meanwhile, with US President Joe Biden wanting to make his country a center for the production and supply chain of electric vehicles, Hyundai Motor Group (Korea) has increased its planned investment in the US by more than $10 billion by 2025 while Samsung Electronics Co. (Korea) built a modern chip factory at a complex worth 17 billion USD in Austin, Texas.
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