BusinessKorea: Saying Good-Bye to China

More than 25 percent of South Korea’s exports went to China as the world’s second largest market in 2013. “However, when the THAAD Incident broke out, excessive dependence on China boomeranged against South Korean companies,” writes Michael Herh for BusinessKorea. China found South Korean products less desirable; for example, Hyundai Motor sales plummeted by 50 percent, and South Korea – despite an overall 30 percent increase in foreign investment – pulled back on investing in China. After North Korea conducted missile tests this year, South Korea permitted the United States to install the Thaad anti-missile systems. China also opposes nuclear weapons for North Korea, but supports the regime and does not want an increased US presence in the region. South Korea firms strive to “diversify their production bases and markets into Southeast Asia, Europe, and the United States on a full scale,” Herh explains. “South Korean companies are rushing to withdraw from China,” and turn to Indonesia, Vietnam and Malaysia as alternatives. He also reports that Vietnam will serve as the core production base for Samsung Electronics and “South Korean battery makers also scrapped their investment plans for China in concert this year. Since last year, the Chinese government has been delaying the certification of Korean companies' batteries for electric cars.” The article describes other cancelled plans and South Korea hopes reduced dependence on China will increase competitiveness. – YaleGlobal