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Trade with S. Korea on fast track
2005-03-04 06:26:19 XinhuaEnglish
BEIJING, Mar. 4-- China and South Korea witnessed brisk growth in bilateral trade and investment as South Korea, for the first time, replaced Japan as the third largest investor in China in 2004.
According to statistics from China's Ministry of Commerce(MOFCOM), South Korea's realized foreign direct investment(FDI) to China topped US$6.25 billion in 2004, reflecting an increase of nearly 40 per cent year on year.
By November 2004, China had approved some 32,299 South Korean projects in China with a contracted value of US$49.1 billion.
According to the South Korean statistics, FDI to China totalled US$3.63 billion, representing 45.8 per cent of South Korea's total overseas investment last year.
The figures from South Korea are lower due to differences in calculating the reinvestment amount by South Korean companies located in China, sources from the South Korean Embassy in China said.
China, for several years, had been the largest investment magnet of South Korea, an MOFCOM official who declined to give his name said.
The majority of South Korean investment flows into China's northern coastal provinces which are near South Korea, said Kim Dong-sun, South Korea's commercial chancellor.
To cash in on the transportation advantages and low labour costs in these provinces, South Korean enterprises have moved some of their labour-intensive industries, such as the manufacturing of textile, shoes and garments to China.
"Around 50 per cent of South Korean manufacturing companies are considering investing in China," Kim said.
A number of big names from South Korea, including Samsung, LG Electronics and Hyundai Motor attach great importance to their expansion in China.
Kim Ssang-su, chief executive officer of LG Electronics, said during his visit to China last year, the company stuck to its principle of being a successful Chinese company instead of a successful South Korean company in China.
Actually, as multinational South Korean enterprises are revving up to tap the Chinese market, small and medium-sized companies are also working hard to increase their presence in China.
Some small South Korean service providers, such as consultancy companies, advertising companies and technology providers, started their career in China following the steps of large companies.
Koo Dong-gun, who operates a Korean style restaurant in Beijing, said his business grew well as more and more people from South Korea began to work and live in the city.
"I invested about US$54,000 to open this restaurant two years ago," he said."I plan to open another restaurant in the city in the second half this year."
In line with the country's"go-out" policy, China also made breakthroughs in its outbound investment into South Korea.
The Chinese Government approved around 90 direct investment projects to South Korea by the end of November 2004, into which Chinese enterprises poured over US$900 million.
Bilateral trade between the two countries rose 42.5 per cent to over US$90 billion last year. China's exports to South Korea stood at about US$27.82 billion, up 38.4 per cent compared with the previous year; the country's imports from South Korea reached US$62.25 billion, reflecting a 44.3 per cent increase.
(Source: China Daily)