The European Union Chamber of Commerce in Korea announced on Aug. 1 that 23 percent of European enterprises canceled or postponed their investment in China in the second quarter of this year. This is because China’s economic growth is slowing down and the United States and the European Union are reshaping global supply chains against China.

Likewise, in a recent survey conducted by the Federation of Korean Industries, 86 percent of South Korean companies in China answered that their investment environment is deteriorating compared to a decade ago. More than 38 percent, 20 percent and 18 percent of the respondents mentioned government risks, discrimination and U.S.-China trade disputes as reasons, respectively.

These days, an increasing number of South Korean enterprises are leaving the Chinese market. For example, Samsung SDI closed two EV battery pack plants in China last year, when LG Electronics closed two plants there.

Meanwhile, they are increasing investment in the United States. Samsung Electronics will invest US$17 billion in Texas to build a foundry and SK Group is planning to invest US$22 billion in the U.S. semiconductor, biotech and energy markets. Hyundai Motor and LG Groups’ planned investments are US$10.5 billion and US$11 billion, respectively. According to experts, this is likely to continue for a while as the United States will keep trying to isolate China from global supply chains.

Source: BusinessKorea