Ahead of FTA, Korea woos investors from ChinaChinese companies are demanding the Korean government ease business licensing procedures and enhance legal systems related to land acquisition inside free economic zones, saying they want to invest in a greater variety of sectors beyond real estate.
“It is inconvenient that we have to communicate with different government organizations like the Saemangeum Development Authority and the central government,” said a CEO of a Chinese solar power company currently trying to open a factory in the Saemangeum Free Economic Zone. “I hope the document processes become easier and shorter.”
Vice Minister of Trade Lee Kwan-sup promised to check with related government organizations.
The government designated this week as China Week and held a closed-door investors’ event at the Ritz-Carlton in southern Seoul on Thursday.
The Ministry of Trade, Industry and Energy invited some 61 Chinese companies and Chinese trade associations to listen to their complaints and concerns. The Korean and Chinese governments recently designated free economic zones like Saemangeum as special industrial complexes for Chinese companies in preparation for a free trade agreement to come into effect by the end of this year.
In the past, investor relations events were usually held for American, European and Japanese companies. This was the first time that the Trade Ministry and Korea Trade-Investment Promotion Agency (Kotra) held an event for Chinese companies.
Sixty-one companies attended including Boonma Group, Taifu Heavy Industries, Beijing Yuchen and CNPV, which have already invested in Korea.
In a survey taken before the event, the 61 companies said they intend to make investments in Korea worth $1.1 billion by end of this year, some in Korean start-ups and renewable energy companies.
China is the No. 1 buyer of Korean products even before the Korea-China FTA starts.
Korean companies have invested a total of $63.9 billion in China through 2014, but Chinese companies have only invested $6.1 billion in Korea.
For Chinese investors, Korea’s attractiveness as an investment destination has fallen over the past few years. China steadily increased its outward foreign direct investment (FDI) over the past decade from $26.5 billion in 2007 to $107.8 billion in 2013. According to data compiled the Korean Trade Ministry, of $107.8 billion in China’s FDI in 2013, Korea received only $481 million.
Chinese FDI in Korea used to be higher than that in Japan. Since 2013, Japan started receiving more than Korea.
BY PARK YU-MI, KIM JI-YOON [email@example.com]