Half Of The Enterprises Lose Korean Shoes And Leather Enterprises To Retreat

The Newly Revised provisional regulations on farmland occupation tax in People's Republic of China (hereinafter referred to as the "Regulations") will come into effect on January 1, 2008.

Affected by this, the withdrawal of Korean small and medium-sized enterprises in China is increasing, which has attracted the attention of the Korean government.

It is reported that the new regulations delete the provisions of the original regulations which do not apply to foreign-invested enterprises, and at the same time, increase the tax burden of foreign-funded enterprises and foreign enterprises, foreign-funded enterprises and domestic funded enterprises in the stipulation of the scope of taxpayers.

According to South Korean media, the Ministry of industry and resources in December 23rd said it plans to work together with the Ministry of foreign trade, the Ministry of labour, the Ministry of justice and the Korean Chamber of Commerce to set up "no reason to withdraw from the special task force".

Since January 21, 2008, Qingdao, Guangzhou and other Korean enterprises have been concentrated in the area.

Relevant departments in South Korea say that recently, some Korean enterprises entering China have been trying to get rid of unpaid cases without paying salaries or taxes due to the deterioration of their operating conditions.

According to statistics, as at the end of September 2007, Korea's investment in China and its registered juridical persons in China reached 21 billion 100 million US dollars and 1.9512 000 enterprises respectively, accounting for 25% and 46.7% of Korea's foreign investment and overseas legal persons respectively, 95% of which were small and medium-sized enterprises.

Labor disputes frequently occurred last month, and in Chongming, Shanghai, there was a labor dispute that lasted 7 days.

According to reports, the South Korean sole proprietorship Shanghai and Ren Textile Co., Ltd., by the end of November, repaid wages to 1800 workers through trade unions. However, workers' demands for overtime pay, pension insurance and unemployment compensation have not yet been resolved.

According to a person familiar with the business, this year, since the rise in oil prices and appreciation of the renminbi, business difficulties.

In addition, due to the serious pollution of the textile industry, the general plan for developing the ecological industry has been identified in Chongming.

Affected by the above factors, He Ren textile has already pferred the land occupied by the factory, and the land is only used for rent.

In Qingdao, Shandong, there were also incidents of arrears of wages among Korean SMEs.

According to reports, by the end of 2006, the South Korean management staff of Qingdao Xin five leather company ran away overnight, arrears of wages for workers for several months.

According to statistics, there are more than 4000 Korean enterprises in Qingdao, and become the largest number of Korean enterprises in China.

There are more than 440 thousand employees in Korean enterprises, accounting for 56.7% of the employees of foreign-funded enterprises in Qingdao.

In July this year, the Qingdao labor and Social Security Bureau first released the average price of 50 jobs in foreign-funded enterprises.

The lowest are Korean companies.

Half of the company's losses were reported. A report on the settlement reports of 598 randomly selected Korean companies in China pointed out that the import and Export Bank of Korea concluded that "51.8% of the company's current net profit is in deficit."

Among them, the textile industry, clothing and other fiber products manufacturing and food manufacturing industry, the loss ratio of more than 70%, even the better performance of the auto industry's loss ratio has also reached 40.3%.

South Korean analysts believe that the phenomenon of South Korean enterprises' withdrawal from China is frequent, because the operating conditions of foreign-funded enterprises are gradually deteriorating in the process of restructuring China's economy from light industry to heavy chemical industry.

Most of the Korean small and medium enterprises that enter China are engaged in light industry and are looking at the cheap labor force in China. In order to pform the industrial structure into a heavy chemical industry with high added value, the Chinese government is reducing tax preferences for foreign-funded enterprises and strengthening environmental regulation.

Pu Huanshan, Consul General of the Korean Consulate General of Qingdao, once warned South Korean Enterprises: "not only the Chinese government's policy has gradually changed in the direction of strengthening the rights and interests of laborers, but also the workers have begun to form a sense of rights and interests.

If Korean enterprises do not adapt to this change as soon as possible, they will suffer huge losses if they fail to comply with Chinese laws. "

The trade surplus with China decreased, according to South Korean media. The South Korean customs office recently said that in the first 11 months of this year, Korea's trade surplus with China amounted to US $17 billion 30 million, a decrease of 9.5% (18 billion US dollars) compared with the same period last year.

The average monthly trade surplus this year is around 15 billion US dollars.

If this trend continues to December, the total trade surplus with China will probably be less than US $20 billion this year.

South Korea's trade surplus with China has been reduced due to the growth rate of imports to China larger than that of China's exports.

According to statistics, the surplus of Korea's surplus to China increased by 114% in the 4 years from 2001 to 4 billion 200 million in 2005, but now this trend has slowed down.

This is due to an increase in imports to China (US $9 billion 600 million), which has exceeded export growth (US $7 billion 900 million), plus the increase in wages and salaries of Korean companies entering China.

Zheng Xiangyin, chief research fellow of Samsung Economic Research Institute, said: "as China's economy has entered a stage of sophistication, goods imported from Korea are now exported to Korea.

From the perspective of South Korea's national economy, this is not a good thing.