People visit Samsung‘s booth during the Consumer Electronics Show (CES) in Las Vegas, the United States, Jan. 8, 2019. (Xinhua/Li Ying)
South Korean companies are not scaling down transactions with China even as some of them make global supply chain changes after the COVID-19 outbreak, a survey showed over the weekend. Chinese experts said the survey showed that most South Korean firms are betting on the Chinese market for their recovery.
Even if global value chains are reorganized, South Korean companies‘ transactions with China will not drop, according to a recent survey of 300 South Korean manufacturers, by the Korea Chamber of Commerce and Industry in South Korea.
Some 84.3 percent of the respondents said that they would maintain or expand transactions with China, whereas only 6 percent said they would reduce their business with Chinese partners.
Analysts said the survey showed South Korea industries‘ willingness to continue to cooperate with China, despite calls by some South Korean institutes to “reduce dependence” on trade with China amid containment efforts by the US, and US pressure on South Korea to “decouple” from China economically.
“The survey showed that most South Korean firms are putting their bets on China as their hope of economic recovery in the post-virus era,” Zhang Huizhi, vice dean of the Northeast Asian Studies College at Jilin University, told the Global Times on Monday.
“This is especially true for a large number of South Korean companies that focus almost entirely on the enormous Chinese market,” Zhang said, noting that South Korean companies had engaged in deep deliberation on their direction even before the pandemic.
Some 72 percent of the respondents pointed to the spread of COVID-19 as the biggest factor affecting the restructuring of global value chains. Some 16.9 percent of the surveyed firms cite advances in Chinese manufacturing as the reasons for the change and 7.7 percent cite US-China trade disputes.
Li Tianguo, associate professor at the National Institute of International Strategy, Chinese Academy of Social Sciences, said that South Korean companies are in a readjustment period in their economic cooperation with China amid a Chinese push for self-production of intermediate goods.
Opportunities in China‘s central and western areas and third markets along the China-proposed Belt and Road Initiative (BRI) are increasingly becoming an option for South Korean companies, Li told the Global Times on Monday.
The US‘ trade bullying and technology war has caused collateral damage to South Korea, which exported large quantities of intermediate products to China.
However, efforts by China and South Korea to deepen economic cooperation, and stabilize supply and industrial chains, have effectively buffered that impact.
China and South Korea have agreed to further boost the BRI, upgrade free trade agreement negotiations and push forward the signing of the Regional Comprehensive Economic Partnership.
Trade between China and South Korea during the first eight months this year stood at $179.74 billion, down 3.7 percent year-on-year.