The Chinese-language edition of South Korea’s largest newspaper Chosun recently reported on the results of a business environment fact-finding survey conducted between July and September of last year by the Korea Industrial Research Institute, the Korean Chamber of Commerce Beijing Office, and the Korea Chamber of Commerce in China. Around 500 Korean companies doing business in China were surveyed.
The survey shows that 37 percent of the companies surveyed are considering a change to their business footprint in China within the next five years. Specifically, 8.8 percent are considering withdrawing from China entirely, 3.6 percent are considering moving, and 24.6 percent are considering downsizing. Some 31 percent of companies surveyed are considering withdrawing, moving, or downsizing within the next 2 to 3 years.
The reasons given by respondents include local competition (28.3 percent), the trade war between the United States and China (24.5 percent), and rising local production costs (17 percent). Southeast Asia (36 percent) ranks first among the destinations to which Korean companies are considering relocating their operations.
Some 67 percent of respondents said that China’s internal business environment is deteriorating. Specific symptoms reported include falling market demand (24 percent), changes in Chinese government policies (21 percent), rising production costs (18 percent), political sanctions (15 percent), restrictions on foreign investments (11 percent), and unfair competition (11 percent).
Source: Chosun Chinese, January 1, 2025
https://cnnews.chosun.com/client/news/viw.asp?nNewsNumb=20241262155