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S. Korea asks China to invest in industrial complex in N. Korea

Discussion in 'China & Far East' started by TaiShang, Jan 28, 2015.

  1. TaiShang

    TaiShang ELITE MEMBER

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    S. Korea asks China to invest in industrial complex in N. Korea
    2015/01/23 15:01

    BEIJING, Jan. 23 (Yonhap) -- South Korea's state trade agency asked Chinese firms Friday to invest in an inter-Korean industrial complex in North Korea as Seoul and Beijing reached a bilateral free trade agreement last November.

    The industrial complex in North Korea's border city of Kaesong opened in 2004 as a landmark symbol of rapprochement between South and North Korea. About 120 South Korean firms employ some 53,000 North Korean workers there.

    Goods produced at the Kaesong complex are covered by the bilateral free trade agreement, which was "effectively" reached by South Korea and China during the Asia-Pacific Economic Cooperation meeting in Beijing.

    "The Korea-China FTA will have a good effect on goods produced at the Kaesong Industrial Complex and provide a cost competitiveness in the Chinese market," the Korea Trade and Investment Promotion Agency (KOTRA) said in an investor relations session held at a hotel in Beijing.

    South Korea wants Chinese firms to make inroads into the Kaesong Industrial Complex by forming joint ventures with South Korean firms, KOTRA said.

    South Korea and China also "have been in negotiations on specific contents to give tariff favors on goods produced at the Kaesong Industrial Complex," KOTRA said in a statement.

    "The investment cooperation between South Korea and China will help promote peace and stability on the Korean Peninsula," South Korean Trade Minister Yoon Sang-jick said in a written congratulatory message at the investor relations session.

    Yoon did not attend the session, which was hosted by Kwon Pyung-oh, deputy minister in charge of trade and investment at South Korea's Ministry of Trade, Industry and Energy.

    South Korean companies are estimated to pay North Korean workers a combined $87 million in wages and social insurance per year.

    Experts, however, said that inter-Korean relations still exert great influence over the operations of the joint industrial park, making it an incomplete economic cooperation project between the Koreas.

    The two Koreas remain technically in a state of war as the 1950-53 Korean War ended in a ceasefire, not a peace treaty.
     
  2. C130

    C130 ELITE MEMBER

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    I bet South Korea is losing billions on this Industrial Park in NK.

    I remember the nuke scare and NK had it closed.

    fat cats in SK must of been mad.
     
  3. Raphael

    Raphael SENIOR MEMBER

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    I doubt it. Take a look at:

    Asia Heartbeat arirang

    Cheap labor is not something to scoff at. In times of normal operation, the profits amassed from lower labor costs by South Korean businessmen and conglomerates would definitely recoup (several times over) whatever losses were incurred during brief bouts of inoperation.

    And apart from linguistic and cultural similarities, S. Korea also had one other advantage that they wouldn't have enjoyed had they instead offshored to the Philippines, or some similarly indolent brown state: the fanatically disciplined, hard-working and culturally Confucian work force in North Korea.
     
  4. somsak

    somsak FULL MEMBER

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    If you have "virtually" free labours, what do you produce?
    My Ans: Produce those low skills cheap things and flood SK.
     
  5. C130

    C130 ELITE MEMBER

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    cheap labour yeah, but NK is black mailing SK.

    how much has SK invested in this Kaesong Industrial Complex??? NK can just throw a hissy fit and close it does any time they want.

    SK made a mistake and they know it. if you want cheap labour that isn't from your nemesis South Asia is the best bet.
     
  6. ChineseTiger1986

    ChineseTiger1986 ELITE MEMBER

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    NK can easily wipe off Seoul from the map.

    So SK doesn't dare to say a word even NK has confiscated all their investment.
     
  7. C130

    C130 ELITE MEMBER

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    that's my point. they can just say f it at any time and just appropriate it. they are black mailing SK.

    i just don't see why you would do business with a country that has enough artillery,rockets, to wipe out Seoul in a few hours
     
  8. Raphael

    Raphael SENIOR MEMBER

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    And then NK would lose out on precious revenues, especially hard foreign currencies which they covet. Do you realize that the worker wages are paid directly to the North Korean government? KJU is basically hiring out human machinery to SK. The reality is that N. Korea and S. Korea have about equal amounts of leverage here, and they both suffer from operating disruptions.

    Except there are huge logistical costs and difficulties in operating half a world away. And moreover, they would lose out on the "fanatically disciplined, hard-working and culturally Confucian work force in North Korea". Instead, the worker productivity would be abysmal.