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Over half of South Korean firms are getting ready to both cut back or withdraw companies from China over its stringent zero-COVID measures, in line with a current survey. In the meantime, some 40 p.c of the respondents urged the South Korean authorities to intervene by informing the Chinese language regime of their losses and offering options.
In mid-June, the Shanghai department of the Korea Worldwide Commerce Affiliation (KITA) surveyed 177 South Korean firms in China on the results of Beijing’s zero-COVID coverage on their companies and their plans.
The survey outcomes, printed on June 27, confirmed that 88.1 p.c of the businesses reported “[significant] harm or unfavorable influence” on their companies. Whereas 97.4 p.c responded that their gross sales decreased within the first half of this yr, 31.4 p.c mentioned their gross sales fell by greater than 50 p.c in comparison with the identical interval final yr.
Concerning their plans in China, 55.3 p.c of the businesses mentioned they have been contemplating “enterprise discount, suspension, withdrawal, or relocation,” 24.8 p.c mentioned they would cut back their enterprise in China, 11.1 p.c mentioned they might begin investing outdoors of China, 8.0 p.c mentioned they might withdraw companies from China, 7.6 p.c mentioned they might quickly droop their enterprise in China, and three.85 p.c mentioned they might switch related enterprise again to South Korea.
Then again, 35.9 p.c of respondents mentioned they don’t have any countermeasures and are sustaining their present enterprise plans, whereas solely 7.3 p.c mentioned they might broaden their enterprise in China.
When the businesses have been requested what assist they might need from the Chinese language regime, 20 p.c mentioned they needed “extra transparency and predictability within the nation’s COVID-19 measures,” whereas 18.2 p.c and 17.9 p.c mentioned they might need subsidies and lowered taxes and rents from the regime.
‘Easy Diplomacy’
As well as, 40.4 p.c urged the South Korean authorities to conduct “simple diplomacy” and inform the Chinese language regime of their losses and work out an answer.
In the meantime, 76.8 p.c consider Beijing’s COVID-19-clearing insurance policies will proceed till the top of this yr or past.
The Director of KITA’s Shanghai department, Shin Solar-young, who was in command of the survey, mentioned it’s essential for the South Korean authorities to intervene diplomatically and assist the Korean firms in China.
Shin added that the majority foreign-funded firms in China are experiencing the identical difficulties and losses. Due to this fact, it’s also a great resolution for foreign-funded firms to collectively search out a decision from the Chinese language regime.
The US and Europe have additionally performed comparable investigations.
In early June, the American Chamber of Commerce Shanghai surveyed 133 members about their funding plans in China. The outcomes confirmed that 25 p.c of client and repair firms, and 20 p.c of producing firms, have scaled again their funding plans, with just one firm expressing its intention to extend funding in China.
One other report printed in Might by the European Union Chamber of Commerce indicated that 23 p.c of European firms expressed willingness to withdraw from China, greater than double the variety of firms contemplating such a transfer in early 2022, reaching a 10-year excessive.
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Lisa Bian is a Korea-based author for The Epoch Occasions specializing in Korean society, its tradition, and worldwide relations.
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