South Korean billionaire Chey Tae-won says there’s a need for companies to diversify away from China so the country can maintain its industrial competitiveness.
(Bloomberg) — South Korean billionaire Chey Tae-won says there’s a need for companies to diversify away from China so the country can maintain its industrial competitiveness.
“China is undoubtedly South Korea’s No. 1 trading partner, and the country is an irreplaceable market for us at this point,” Chey, the chairman of Korea’s second-biggest conglomerate SK Group, told reporters during a briefing on Wednesday. “Still, even if we want to boost trading with China, there are limitations given China’s domestic issues, as well other geopolitical risks.”
The need to change focus requires South Korean companies to look for alternative markets and expand into more nascent industries, such as businesses that involve artificial intelligence, Chey said. He made the comments during a rare briefing with foreign media where he highlighted Korea’s proposal to hold the 2030 World Expo in Busan, its second-biggest city.
Read more: Billionaire Chey Backs Korea’s Bid to Host 2030 World Expo
Beijing has been the top buyer of Korean products ranging from semiconductors to displays, but its share has been in decline as the economy has slowed and as Chinese companies have moved up the value chain with more high-tech manufacturing, driven by the national goal of increasing self-reliance.
“The markets are now all fragmented and no longer bound by the control of World Trade Organization like they used to be in the past,” Chey said. “That makes things more difficult for nations like us where the economy depends on exports, and we now need to really find out what’s needed by smaller markets.”
SK Group is also heavily invested in China, with about 27% of semiconductor subsidiary SK Hynix’s annual revenue last year coming from there, according to the company’s yearly business report. The company purchased a chip factory in Dalian from Intel Corp. in 2021, and is constructing another facility there.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.