Korean Media: Four Major South Korean Business Group Presidents Will Accompany the President on Another Visit to China, Could It Open a New Chapter in Bilateral Economic Cooperation

Amid a reduction in Chinese operations by South Korean companies compared to the past, with major economic figures such as the presidents of South Korea's four largest business groups accompanying President Lee Jae-myung on a state visit to China, attention is focused on whether South-Korea-China economic cooperation can accelerate again.

"The era where entering China guaranteed growth" has become history

On the 31st, according to a survey conducted by the Korean CXO Research Institute, a professional enterprise analysis institution commissioned by the Chosun Ilbo, the number of Chinese subsidiaries of South Korea's top 10 business groups decreased from 435 in 2021 to 308 in 2025, a reduction of 127 (17%). If expanded to the entire large business group, the number decreased from 874 to 808 during the same period. In contrast, the number of American subsidiaries of large business groups increased from 885 to 1,673, growing nearly 1.9 times, showing a clear trend of South Korean companies shifting their global resource allocation from China to the United States. Kim Il-sun, director of the CXO Research Institute, pointed out that "China is no longer the kind of market [where simply entering it ensured growth]."

The most representative example is Hyundai Motor and Kia. In 2016, their annual sales in China reached 1.142016 million units, but due to the Saemaul Unyeong (THAAD) incident and the subsequent anti-Korean measures, combined with local companies' low-price strategies, sales dropped to 204,573 units last year. During this process, Hyundai Motor sold its Beijing First Factory (2021) and Chongqing Factory (2024) in China, and the sale procedure for the Changzhou Factory in Jiangsu Province, which was established in 2016, is also ongoing.

The Sino-US hegemony competition is also a variable factor. While China needs to maintain production bases, the key issue is the significant geopolitical uncertainty. For South Korean companies, it seems they can only perform a difficult balancing act.

In particular, in the semiconductor industry, according to U.S. technology restrictions on China, the introduction of U.S.-made equipment into semiconductor factories in China requires adherence to a one-year licensing system. Samsung Electronics produces NAND flash memory at its Xi'an factory, and SK Hynix produces DRAM at its Wuxi factory, structuring itself in this way to absorb supply chain risks.

On the other hand, Chinese investment in South Korea is increasing. According to analyses, as the competition between the U.S. and China intensifies, South Korea's strategic value has also risen. According to data from the Korea Institute for International Economic Policy (KIEP), the declared amount of Chinese investment in South Korea increased by 147.4% year-on-year in 2024, reaching $6.79 billion, setting a new record high. In 2024, China's battery materials company Xiamen Tungsten added an additional $15 million investment to its existing $13 million investment in the Sunan New Wanjin factory in South Korea. In the display field, Chinese enterprises such as Shanshan Group have acquired LG Chem's polarizing film business, and have executed large-scale investments rarely seen since the 2010s.

"Can we open a new chapter?" A business delegation visiting China after six years

Against this backdrop, about 200 business leaders, including Chairman Lee Jae-yong, Chairman Choi Tae-woon of SK Group (Chairman of the Korean Chamber of Commerce and Industry), Chairman Jeong Eui-seong of Hyundai Motor Group, and Chairman Goo Kyung-mo of LG Group, will join President Lee's visit to China. The business community has high expectations, believing "this could be an opportunity to break through the impasse." Because a large-scale economic delegation's visit to China is being carried out after six years following the 2019 Korea-China-Japan Summit. A business figure who requested anonymity said, "China remains the world's most important factory and market," "but it is difficult to make bold investments as before."

Choi Man-soo, senior research fellow at the Korean Institute for Finance, stated in his report "Changes in the Environment of South-Korea-China Economic Cooperation and Response Strategies" that "investments in industries sensitive to geopolitics, such as semiconductors, batteries, and automobiles, are economically 'business footholds,' but they may also become potential hostages," and "the government has consistently maintained a position of not interfering in corporate decision-making autonomy."

Source: Chosun Ilbo

South Korean President Lee Jae-myung Visits China

Original: toutiao.com/article/1853276245299210/

Statement: This article represents the views of the author himself.