Samsung Electronics’ chip production plant in Xian, China. (image: Samsung Electronics)
SEOUL, Dec. 23 (Korea Bizwire) — A majority of South Korean businesses in China are struggling with a rapidly deteriorating environment for local investment as well as regulatory discrimination compared to Chinese competitors, a major Korean business lobby group said Wednesday.
The Federation of Korean Industries conducted a survey of 131 businesses (excluding financial firms) that have been active in China for longer than 10 years, 85.5 percent of which believed that China’s local investment environment has worsened since 10 years ago.
The reasons included ‘risk posed by the Chinese government’ (38.1 percent), ‘discrimination between national and foreign companies’ (20.5 percent), ‘intensifying U.S.-China trade dispute’ (18.2 percent) and ‘stronger environmental regulations’ (15.2 percent).
Of Korean businesses in China, 8 in 10 (81.7 percent) believed they were being discriminated against in comparison to Chinese competitors.
Roughly half believed they were being discriminated against during authorization procedures, followed by regulations on fire and safety (21.5 percent), and environmental restrictions (14 percent).
Two thirds of the respondents said their annual sales have increased from 10 years ago, while 33.6 percent said otherwise.
Companies with annual sales lower than 10 years ago blamed the drop on ‘intensifying local competition’ (45.4 percent), ‘lower local demand’ (27.3 percent) and ‘restrictions by the Chinese government’ (22.7 percent).
Lina Jang (linajang@koreabizwire.com)
