“Let’s get out of dependence on China”… Diversification of supply lines

Love

ⓒ SBS & SBS Digital News Lab / RSS feed is permitted for personal reader use. Unauthorized reproduction such as posting using feed is prohibited.

▶Download SBS News App

ⓒ SBS & SBS Digital News Lab: Unauthorized copying and redistribution prohibited

China’s largest trading partner is China. Although we export a lot to China and import the most raw materials from China, Korean companies are diversifying their investments in view of the recent urea water crisis and the US-China conflict.

▶ Watch the video

China’s largest trading partner is China. Although we export a lot to China and import the most raw materials from China, Korean companies are diversifying their investments in view of the recent urea water crisis and the US-China conflict.

Reporter Han Sang-woo reports.

The domestic urea crisis was caused by production cuts due to the power shortage in China.

As the risk of over-reliance on China grows, companies are diversifying their supply chains, even if they are a bit pricey.

In addition, Korean companies that have entered China due to China’s outright country-first policy are accelerating the ‘post-China’ movement.

SK sold 100% of its stake in SK Rent-a-Car, and Hyundai Motor Company has already sold one of its five factories in China.

Samsung closed its PC factory last year following the shutdown of its smartphone factory.

Instead, there is a clear increase in investment in the US, with Samsung Electronics recently constructing a 20 trillion won semiconductor plant, as well as investments in the battery sector such as SK On and Samsung SDI, and strengthening investments by Hyundai Motor and LG.

In the four years from 2017, direct investment in the United States increased by 75% compared to the previous four years.

In addition to the US tightening its incentives to create jobs in the country, the sharp US-China conflict has also had an impact.

In response to the US public restraint on high-tech industries, battery makers are turning their investments to Europe.

[류성원/전경련 산업전략팀장 : 차이나 리스크 최소화 및 다양한 공급망 확보의 필요성, 중국 시장 내 우리 기업의 매출 정체, 반도체, 2차 전지 등 대미 수출 비중 확대 등이 복합적으로 영향을 미친 것으로 보입니다.]

Although China, the largest trading partner, cannot but be conscious of, diversification of business partners and reorganization of investment have emerged as strategic tasks.

(Video editing: Lee Seung-yeol)

▶View the original article on SBS News

▶Download SBS News App

ⓒ SBS & SBS Digital News Lab: Unauthorized copying and redistribution prohibited

Reference-news.sbs.co.kr

Leave a Reply

Your email address will not be published. Required fields are marked *