No. of Chinese Firms Here Quadruples

By Kim Jae-won
Staff Reporter

The number of Chinese firms operating here has risen nearly four-fold over the past decade due to growing economic ties between the two neighboring countries, the nation's tax agency said Sunday.

In a report, the National Tax Service (NTS) said the number of corporations from the emerging world's third-largest economy reached 445 in 2008, up from 118 in 1998.

This is compared to the average 2.2-fold increase for all foreign companies during the same period. In 2008, there were 8,162 foreign companies in South Korea, up from 3,655 in 1998.

The growing presence of Chinese players here is due mainly to the increase in bilateral economic cooperation between the two countries after they have boosted economic cooperation following the establishment of diplomatic relations in 1992.

China has become Korea's largest trading partner, with the country posting a $33.8 billion trade surplus with China last year ― almost two-thirds of Korea's entire trade surplus.

``As both countries have extended the size of trade over the last 10 years, more Chinese firms launched businesses in the nation,'' said Lee Dong-shin, director at the international taxation division.

By industry, the wholesale and retail sector topped the list with 289 firms, followed by the manufacturing, services, transportation and telecommunication industries, which reported 43, 40 and 40 firms, respectively.

``Wholesale and retail companies occupy the largest portion of Chinese firms. They import various domestic products for consumption, and industrial products to the nation," Lee said.

Chinese firms also are gearing up for listing themselves on the local bourses. So far 10 Chinese companies have gone public on the KOSPI and Kosdaq bourses, and 10 more firms plan to do so this year.

The NTS said that Japan had the largest number of companies operating in Korea, with the total reaching 2,373 in 2008 up from 1,276 in 1998. This was followed by 1,854 U.S.-owned companies. China ranked third with 445, while the number of German and British-owned companies also moved up by around two-fold over the 10-year period.

shosta@koreatimes.co.kr

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