Thanks to the visit from President Xi Jinping, many Chinese entrepreneurs with a keen interest in Korean investment have come to Korea. They represent many Chinese corporations and will sign MOUs of more than US$7.05 billion with Korean companies.
Following General Secretary Xi Jinping’s schedule in Korea on July 3, seven delegates from the Department of Commerce in China as well as 116 representatives from 94 Chinese companies attended the Korean Investment Climate Fair held by the Ministry of Trade, Industry and Energy and KOTRA at KOTRA headquarter.
The Chinese Department of Commerce and Chinese corporations will sign four major MOUs before leaving Korea: between the LG Chemicals and the Nanjing city government for energy cooperation, POSCO and Chongqing Iron & Steel, SK and Zhengwei Group, and SKC and TCL Group. The four MOUs together are US$7.05 billion in value, including LG Chemicals’ US$400-500 million and two others. The amount of the last one has not yet been disclosed.
This is almost half of Korea’s US$17 billion foreign investment target this year, and total foreign investment during the first half of this year reached US$10.7 billion.
The Korean government introduced the current foreign investment policy, investment climate in Korea, and major ongoing projects including Saemanguem China Valley to representatives from Chinese companies specialized in finance, investment, trading, services, infrastructure contracts, real estate development, manufacturing, bio-medicine, agriculture, and mining. It is very important to capture China, the world’s major investor, now.
Chinese direct investment in Korea increased 670 percent to US$770 million until June this year, relative to the previous year, as major Chinese investments such as Tencent’s into CJ Games was brought in. If indirect investment through Hong Kong and Singapore is counted, total Chinese investment increased 1,500 percent to US$1.5 billion.
It is highly expected that many investment projects will be discussed, as Chinese entrepreneurs attended the Korean Investment fair along with General Secretary Xi Jinping’s visit.
Two countries both understood that investment cooperation should be expanded to real estate development and cultural content including movies, TV dramas, and fashion with Hallyu effects, stepped further from existing areas of manufacturing.
Luoxing, chief art director of Beijing Art Exchange, expressed a keen interest in Korean dramas and movies and joint investment in this field. Director Luoxing will sign a contract to co-produce “Kunmingjiyeon” with director Kang Jae-gyu.
The CEO of Shinhwayeon Real Estate Corporation said, “Jeju Island should be open-minded for foreign investors. We are interested in Yeongjongdo as well as Jeju.” This is an indirect counter-expression against Won Hee-ryong, governor of Jeju Island, who showed negative opinions on Chinese investment. Governor Won Hee-ryong, right after being elected recently, requested to delay the investment permission and official ground-breaking ceremony of “Resort World Jeju” of Landing Group Hong Kong project after his inauguration.
Oh Young-ho, CEO of KOTRA, said in his greetings, “Cooperation between Korean and Chinese companies shall be upgraded and diversified, evolved from manufacturing-based import and export models for the demands of advanced countries. Trading and investment structure, traditionally based on manufacturing, between Korea and China should be targeted to link new growth momentum of Korea and strategic businesses of China.”
Ryu Jeon-hoon, director of Department of Commerce in China that has recently established investment information archive for five major industry fields including natural resources, agricultures, energy, industrial and consumer goods and IT mentioned, “Chinese entrepreneurs in fields of infrastructure construction, real estate development, financing, business service, industrial manufacturing, agricultures and mining are expecting effective cooperation with Korean companies.”