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  • » 11/14/2006, 00.00

    CHINA – SOUTH KOREA

    China: new economic policies cause Korean firms to leave

    Theresa Kim Hwa-young

    A report by the Korea Trade-Investment Promotion Agency said around 6,000 small South Korean companies had left because of restrictive decisions taken by Beijing. Their preferred destination for relocation is Vietnam.

    Shenzhen (AsiaNews) – The number of South Korean firms quitting China is on the rise. The latest to do so is Volta Tach Co., a South Korean firm that produces batteries for mobile phones in Shenzhen, China. It plans to leave the country to establish a new factory in Binh Duong, Vietnam. The decision was prompted by new Chinese economic policies that increase trade restrictions and reduce tax benefits for exported products.

    These policies make it unprofitable and risky for smaller companies to continue manufacturing in China.

    Volta Tech currently pays 170,000 won in taxes for manufacturing every one million won worth of goods, receiving a refund of all but 40,000 won after presenting proof of product export. However, this benefit will cease at the end of the year.

    Wi Un-bok, in charge of overseas marketing, said: "Our business uses many non-ferrous metals such as lead and thus produces serious concerns [for Beijing] regarding environment pollution. Due to the facts that the Chinese government intends to reduce benefits and the cost of labour is rising, it pays us to move our base of production to Vietnam."

    According to a report presented on 12 November by the Korea Trade-Investment Promotion Agency, Volta Tach is not alone: around 6,000 firms have already taken the same decision.

    The agency said: "The Chinese government reduced tax benefits on 1,130 items in September and then added 804 products to a list of trade restrictions. Such measures are aimed at lowering the competitive edge of products manufactured by foreign companies in China, but they are too restrictive."

    Experts say Beijing is also worried about a growing shortage of energy and manpower, as well as environmental pollution, and so it is seeking to promote domestic industries, which alone can counter the influx of foreign industries that kill the domestic market.

    The report said the only alternatives open to Korean firms were either to leave China and return home or else to shift to other nations offering more attractive guarantees.

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    See also

    14/10/2005 SOUTH KOREA
    Seoul government and opposition disagree about overtures to Pyongyang


    10/10/2005 CHINA
    No more cheap labour in China on the way
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    24/03/2006 CHINA
    China is black hole of Asia's deforestation

    The Chinese market imports more than 50% of timber from countries where illegal logging is rife and where deforestation is destroying the lives of the "poorest communities in the world".



    04/01/2006 CHINA
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    This was revealed by an economic planning executive. The liberalization of coal prices is on the agenda, as well as increased energy production. But more attention will also be paid to agricultural incomes and production.



    29/07/2017 13:20:00 NORTH KOREA
    North Korea’s GDP grows by 3.9 percent, but North Koreans do not feel the benefits

    Growth is due greater coal exports to China. North Korea’s per capital income is US$ 1,300 compared to South Korea’s US$ 28,600. Since the start of the year, Beijing has cut coal imports by 75 per cent.





    Editor's choices

    CHINA – VATICAN
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    John Baptist Lin

    Last December, Mgr Peter Zhuang Jianjian of Shantou (Guangdong) was forced to go to Beijing where "a foreign prelate" from the Vatican asked him to leave his see to illicit bishop Joseph Huang Bingzhang. He had received the same request last October. Mgr Joseph Guo Xijin, ordinary bishop of Mindong, is expected to become the auxiliary or coadjutor of illicit Bishop Vincent Zhan Silu. Sinicizing the Chinese Church means supporting the principle of independence and follow the leadership of the Communist Party.


    VATICAN - PERU
    Pope in Peru: Young people, the heart can’t be “photoshopped”, because that’s where real love is found



    At the Angelus in the Plaza de Armas, Pope Francis calls on young people to follow Jesus with all of themselves, without discouragement, in the example of St. Martin of Porres, the half-caste saint. Silent prayer for peace in the Republic of the Congo. To the bishops, the example of St. Turibius of Mogrovejo, an indefatigable evangelizer: "Today we would call him a 'street bishop'". To the contemplative religious the invitation to pray for the unity of the Peruvian Church.


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