Nearly Incognito
Unlike recent high-profile visits of major U.S. CEOs to Beijing and Shanghai such as Elon Musk of Tesla and Jamie Dimon of JP Morgan Chase, those of major Korean companies with strategic production bases in China have been keeping a low profile. Even if they visit China, they seem to be refraining from carrying out activities that may provoke the United States, such as not visiting their business sites in China.
According to industry sources on June 5, only two of them have visited China since the outbreak of the COVID-19 virus -- SK Group Chairman Chey Tae-won and Samsung Electronics Chairman Lee Jae-yong. In March, Chey attended the Boao Forum in China and gave a speech at a session on measuring corporate ESG performance. It was his first visit to China in four years since November 2019, but did not go to the SK hynix plants in Wuxi and Dalian.
Samsung Electronics Chairman Lee Jae-yong traveled to China in March to attend the China Development Forum in Beijing. Lee visited a Samsung Electronics plant in Tianjin and held a closed-door meeting with a high-ranking official of Tianjin City but did not visit Samsung Electronics semiconductor plants in Xian and Suzhou of China. Lee nearly traveled incognito. Hyundai Motor Group Chairman Chung Eui-sun, LG Group Chairman Koo Kwang-mo, Hanwha Group Vice Chairman Kim Dong-kwan, and Posco Group Chairman Choi Jeong-woo have not officially visited China since the full-scale spread of COVID-19 in March 2020, the companies said.
These actions were taken by the heads of Korea’s business groups based on their strategic judgments due to the U.S.-China conflicts, analysts say. While they cannot disregard the importance of the huge market of China, they are forced to consider what the U.S. government will think about them while keeping China in check in high-tech industries on artificial intelligence, semiconductors, and quantum computers that are closely related to America’s foreign affairs and security. The current Korean government’s diplomatic direction is tilted toward the United States in the midst of the U.S.-China hegemonic rivalry has also narrowed the scope for Korean companies’ business activities in China. LG Group did not respond to Chinese President Xi Jinping’s visit to an LG Display factory in Guangzhou of China in April. SK Chairman Chey Tae-won hinted at his concerns in a YouTube interview in September 2022, saying, “We can’t help but think about geopolitical and geo-economic issues.”
However, while officials of major U.S. companies are actively visiting China and taking care of their companies’ business operations in China, many are wondering if the heads of Korea’s conglomerates will sit on the fence, not making noticeable moves. Experts say that Korean companies that cannot completely exclude China with its huge market and supply chains need to prepare for changes in the U.S.-China conflict and that Korea needs to find guidelines on how to handle relations with China.”