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Korean Government Raises Fund for Chinese Domestic Market Penetration
‘Made By Korea’ Strategy
Korean Government Raises Fund for Chinese Domestic Market Penetration
  • By Jung Suk-yee
  • December 10, 2015, 01:45
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The Ministry of Finance and Planning said on Dec. 9 that it will raise a fund of three trillion won in order to assist in Korean enterprises’ business in the Chinese market. Two-thirds of the amount is to be borne by the Korea Development Bank and the rest by the Korea Investment Corporation. The fund is to be invested in the M&A of domestic Chinese firms, establishment of local production and distribution networks, etc.

A number of Korean companies are planning to make use of the fund along with the Korea-China FTA in making inroads into the Chinese market. The idea is to expand the concept of their domestic market to cover that of China while the Korean government shifts the focus of its industrial policy from Made in Korea toward Made by Korea.

Earlier in October this year, President Park Geun-hye said that Korea needs to be more engaged in M&A and equity purchase in China with European and Japanese enterprises taking sizeable profits by such means. In this context, the Korean government is planning to increase the amount of the fund depending on future conditions.

In the interest of the efficiency of operation, the fund is to be operated on a capital call basis, which means the execution is carried out when investment targets are fixed.