It has been found that most South Korean manufacturers’ business in China has come to a halt since the South Korean government decided to accept THAAD deployment in July last year.
The examples include SK Innovation, which was planning until late last year to set up a battery factory with a Chinese partner. The battery manufacturing facilities of LG Chem and Samsung SDI in China are currently operating at a capacity utilization of 10% to 20%, too.
In January this year, the Chinese government extended its anti-dumping duties on optical fibers manufactured by LS Cable & System and Korea Optical Telecom. In November last year, the Chinese government launched an additional anti-dumping investigation on polysilicon exported by OCI, Hanwha Chemical, etc. It initiated the same investigation on polyformaldehyde in the preceding month and planning to take safeguard measures against sugar in September 2016.
Under the circumstances, South Korean companies’ business activities in China are shrinking. According to the Ministry of Strategy & Finance, their reported direct investment in China fell from US$4.39 billion to US$4 billion between 2015 and last year. “The pressure the Chinese government is putting on South Korean manufacturers is likely to continue to intensify for the time being and, as such, their business expansion in China will not be easy for a while,” said an industry insider.