Korean companies face business setback in China amid soured relations

[Image source: Gettyimagesbank]

South Korean companies are facing major disruptions in their operations in China amid an unfavorable environment led by the ongoing conflict between Washington and Beijing and other events such as the enactment of the anti-spy law in China.

According to the office of the Korean community in Beijing on Friday, the number of residents and expatriates in Beijing has dwindled to about 105,000 from nearly 100,000 in 2013 before the Terminal High Altitude Area Defense (THAAD) dispute.

“Even if I submit reports related to expanding investments or entering new businesses in China, the headquarters shows no interest,” said an unnamed employee at a large Korean company in Shanghai. “My motivation to work has been lost.”

Other employees that have worked in China and returned to Korea noted that it was difficult to work in China, “physically, mentally, and economically.”

The challenging working environment has placed many employees to shun from working in China.

Recently, a major Korean company received no applicants for positions in its Beijing office. It even offered incentives, such as promotions, but no applicants have emerged even a month after the application deadline.

The phenomena comes as Korea-China relations sour under the Yoon Suk Yeol government. Concerns rise that if the trend continues, there may be a significant gap appearing in private networks and exchanges between Seoul and Beijing.

The soaring cost of living and education in China, in the meantime, is considered as a deterrent for working in China. The tuition fee for international schools in Beijing, for example, exceeds 300,000 yuan ($41,969) per year for elementary school students and nears 350,000 yuan for middle and high school students.

The recently implemented anti-spy law in China is also making it difficult to guarantee personal safety.

“We are making some preparations, such as signing consultation contracts with Chinese law firms related to the anti-spy law, but the regulations themselves have many ambiguous points,” said a Korean representative in Beijing. “We need to be extremely cautious.”

Lee Seung-seok, a researcher at the Korea Economic Research Institute, noted that if the U.S-China and Korea-China relations improve in the near future, “companies may not be able to respond immediately as the situation of the dwindling pool of Chinese specialists persists.”

“Support from companies and the government is necessary to maintain competitiveness in China,” Lee said.