BIZCHINA / Weekly Roundup
On the ball
(China Daily)
Updated: 2006-03-29 09:54
Here's some recent news you might have missed: South Korea officially
overtook Japan to become China's third-largest source of overseas
investment in the first two months of this year.
The country is only behind Hong Kong and the British Virgin Islands, the
Ministry of Commerce announced on March 13.
Another recent news report could well explain why South Korean companies
are increasingly interested in pumping money into the country. Samsung
China announced earlier this month that last year's sales hit US$25.3
billion, beating its target of US$25 billion. In 2004, the figure jumped
to US$24 billion from US$16 billion the previous year.
Over the past 14 years, South Korean companies have been so successful in
China that many including Samsung, LG and Hyundai have become
inspirations for Chinese enterprises.
Riding the wave
Shin Bong-kil, Minister of the Embassy of the Republic of Korea to China,
believes many South Korean firms have simply excelled at keeping up with
economic and industrial trends and grasping opportunities in the Chinese
market.
He says that South Korean companies have tackled overseas markets in two
stages. Companies such as Hyundai and Daewoo broke into the Middle
Eastern market in the 1960s, providing them with profits to further
develop business in other countries. The other wave of overseas
development was focused on the Chinese market since 1992, when the two
countries established diplomatic relations.
Geographic proximity, a history of exchanges dating back more than 1,000
years and shared Confucian values have made China an ideal investment
destination.
South Korean giants Samsung and LG are both planning operations in China
on the same scale as at home. LG, for example, has even constructed a
twin-tower building in one of Beijing's top business districts, similar
to its twin-tower headquarters in Seoul.
Gregory Lee, chief marketing officer of Samsung Electronics, tells China
Business Weekly that the company is already the second-largest foreign
investor in the country, with US$4.5 billion.
Heavy investments in China are only part of the South Korean success
story, however. Their understanding and anticipation of industry trends
has also been a big factor. When Samsung Electronics and LG Electronics
entered the market around 1992, many Chinese families were making the
transition from black and white to colour TV sets.
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