Posco and Hyundai Steel, companies of South Korea, are mulling over pulling out their business from China and investing and setting up plants in India. Andhra Pradesh seems to be the top destination for these investments. Complete Coverage: Coronavirus
Crux of the Matter
The COVID-19 crisis has tarnished China’s image on the global front as nations accuse China of opaqueness in sharing information and covering up the crisis. President Trump has been most vocal about the issue. Recently, Japan, in its stimulus package announced funds to relocate Japanese businesses in China back to Japan or other countries, an effort to reduce the reliance on China.
Moving Out: Says South Korea South Korean Companies as precautionary measures have also started mulling over shifting their investments and operations from China. Companies want to transfer their investments to India. Leading Industrial Companies like POSCO and Hyundai Steel have shown interest in setting up plants in India. South Korea consulate based in Chennai has received a number of requests from various companies of South Korean to set up plants in India. “We have requests from two iron and steel companies, some startups and one from the hospitality sector which wants to come to India from China,” said Yup Lee, the deputy consul general for the Consulate General of The Republic of Korea. Both the companies are in talks with the government of India. These industrial giants have shown interest in investing in Andhra Pradesh. Andhra State government is quite open about the new investments in the state as it will increase employment in the state. Coastal areas with ports will also enable ease of trade for these companies.
Tap Japanese Companies HDFC Bank chairman Deepak Parekh, speaking on this matter said that the Government of India should take a step ahead and welcome the investment for Japanese companies in India. Japanese Companies as a part of the de-risking strategy want to disinvest nearly $2 billion from China.
“We should make it easy for the Japanese to come to India rather than them going to Malaysia, Vietnam or Thailand. States have to take the initiative and offer them 2,000 to 5,000 acres in some special zone where they do not have to look for land or building approvals,” said HDFC Chairman Deepak Parekh.
Tap Japanese companies, Deepak Parekh tells states https://t.co/seW5JxqTjV — TOI India (@TOIIndiaNews) April 12, 2020
Curiopedia
In 2016, China imposed an unofficial boycott on South Korea in order to stop them from deploying its missile system THAAD. However, at the end of October 2017, the two countries ended the 1-year-long diplomatic dispute.
Asia’s three large economies China, Japan, and South Korea held a meeting in December 2019 at Chengdu in China, where heads of all 3 governments pledged to accelerate their long-standing free trade negotiations. No solid decisions were made in this meeting.
South Korea is the 5th largest export economy in the world. In 2017, South Korea exported $596 bn and imported $471 bn, resulting in a positive trade balance of $124 bn. And the top export destination of South Korea is China ($149 bn).
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