More Aid for Those Seeking China Exit
By Jane Han
Staff Reporter
Business and trade support centers are typically serviced to those seeking startups, but recently, a new type of assistance is being offered. It's for those who want out of China.
Crippled by the quick-to-change state regulations and slashed incentives, more than 45 Korean owners last year alone fled Qingdao, a eastern port city where Korean firms are concentrated, in the middle of the night.
Although these ``midnight flitting'' businessmen should be blamed for their negligence in not taking responsibility, they claim that the complicated liquidation process in China and threatening creditors pushed them to the edge.
``It takes from six months to two years to get out of China,'' said Lee Jong-sung, a senior researcher of the Asia division at the Korea Chamber of Commerce and Industry (KCCI), explaining that many of the legal procedures there are difficult to decipher, nontransparent and irrational.
To help assist the debt-hit Koreans to weave through these conditions in the once ``land of opportunity,'' the KCCI said it will systemize and expand its business consultation center in Beijing early next month.
The new service is quite the opposite from just a few years ago when local manufacturers were in a rush to break into China, where there was cheap labor, generous incentives and tax breaks.
``China has a convenient one-stop service for investors stepping in, but come time to leave, it's a whole different story,'' said Lee, adding that the ``midnight flitting'' cases are sharply rising as the Chinese government is increasingly stripping away incentives that attracted investors before.
Park Jin-hyung, KOTRA's China division head, said, in order to prevent these incidents ― which can eventually escalate into diplomatic and trade disputes between Seoul and Beijing ― Korean businessmen must understand China's changing paradigm.
To educate those unaware, KCCI and the Ministry of Commerce, Industry and Energy said they plan to jointly issue a handbook outlining the exit process in China.
Earlier this month, the Korea International Trade Association (KITA) invited a labor and tax expert from the Chinese embassy to brief on upcoming changes in regulations.
And to better understand the on-site situation, the ministry said it plans to send a delegation to Shandong, Guangdong and other provinces for an inspection later this month.
Stressing that all of this assistance is critical, Lee says while some think that exit support is impudent, that would be a misunderstanding.
``Making a good investment is not the only smart thing,'' he said. ``Speedy, legal liquidation is part of a clever business strategy, too.''