ROK Giants Rush for Market Shares in China: Roundup

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Last updated at: (Beijing Time) Wednesday, July 24, 2002

ROK Giants Rush for Market Shares in China: Roundup

LG recently announced to invest US$ 400 million for putting up two "LG Beijing Towers" of 30 storeys high along the Chang'an Avenue for its headquarters in China; In the meanwhile, Samsung also re-pumped US$ 46 million for a second factory in its Suzhou Industrial Park...

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LG recently announced to invest US$ 400 million for putting up two "LG Beijing Towers" of 30 storeys high along the Chang'an Avenue for its headquarters in China. In the meanwhile, Samsung also re-pumped US$ 46 million for a second factory in its Suzhou Industrial Park.

As learned, after China's entry into the WTO the foreign goods of the USA, Japan and the Europe, the three big factions are undergoing a new development tendency and experiencing a new situation in China. Whereas the ROK giants as the "fourth detachment" are making their powers in the Chinese market felt with every passing day.

Persons of the business circle are of the opinion, though the ROK enterprises entered the Chinese market later than the National and Sony, the old Japanese enterprises they put up a stance to overtake the former so far as the investment is concerned.

The latest LG news says, with an investment of US$ 400 million, the evacuation work on the ground for putting up the LG headquarters, its central business area along the Chang'an Avenue has already been started. For this, the chairman and president of the LG China Co., Ltd. said with a smile, "If all the work can be carried out smoothly, the CEO of the LG Group will come to work in China."

As learned, to put up the LG headquarters in China, the 50 percent of its total investment, i.e. US$ 200 million will be put in from the four LG companies within two years. And the rest will be financed through Chinese financial organizations, foreign big enterprises and other financial organizations to be paid back by installment. Also as learned, this is the third big move for the LG to increase its investment in China in a time-span of a year. The former two times were another US$ 400 million and that 400 million in the US dollars for the expansion of its production lines in China as LG ever announced in last May.

Following the step of the LG to increase investment in China is the Samsung, the giant in electric appliance, which is almost on a par with the LG. Recently we see Samsung make its frequent appearances in media, most of which are the newest moves in China. Of course, the most attractive one is its investment of US$ 46 million in the Suzhou Industrial Park for the establishment of a second factory to result in an annual productive capacity of 1.2 million air-conditioners and a million compressors. To date, the Samsung total investment in China has reached 2.2 billion in the US dollars, the greatest amount of investment by Samsung next only to the ROK itself. The development trend shows that China is most likely to become, instead of the USA, an overseas market receiving the most investment from the Samsung in a time-span of 3 - 4 years.

The LG, Samsung and Hyundai are the three giant enterprises of the ROK in China. However, as compared to the all-round "full blooming" of LG and Samsung in China, Hyundai is still left far behind on the "road of household appliance" in China but this year has already witnessed some changes in this aspect.

Not long ago, Hyundai signed an agreement with the Zhigao Group in Nanhai, Guangdong Province, deciding to engage jointly in producing the sophisticated air-conditioner. Persons of the trade hold that the signing of the agreement has announced the formal march of Hyundai with a yearly turnover of US$ 85 billion into the Chinese air-conditioning market and the dawning of a new world-famous brand of a household apparatus in China. As revealed, starting from the last June onwards, the sophisticated air-conditioner has made its appearance in the chain-supermarkets and large malls in China's municipalities and some specially listed cities and will further cover other cities in the country.

The LG chairman and president expressed to the reporter not long ago that LG will speed up its development pace in China without changing its major orientation and that's why it has intensified its investment. And as learned the speeding up is mainly expressed in its products. Take the microwave oven for instance, last year saw its output being at 3 million sets but this year will probably be the 4 - 5 million sets. Besides, LG doesn't mean to sell its products that are turned out in the ROK in China but to sell what has been produced in China to the outside world. The eighty percent of the microwave oven turned out in Tianjin are exported and ninety percent of the CD-ROM made in Huizhou also exported. He said, the LG doesn't mean to fight for the first in China but to strive for the first in the world and to achieve this it has to use the advantages of the Chinese market.

By People's Daily Online

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