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Investment in Korea Down for 3rd Straight Year
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Suwoner10



Joined: 10 Dec 2007

PostPosted: Sun Jan 06, 2008 2:57 am    Post subject: Investment in Korea Down for 3rd Straight Year Reply with quote

http://www.bloomberg.com/apps/news?pid=20601080&sid=aRsJAhtt2w3Y&refer=asia

Quote:
Foreign Direct Investment in South Korea Fell 6.5% (Update1)

By William Sim

Jan. 6 (Bloomberg) -- Foreign direct investment into South Korea fell for a third straight year in 2007 as investment in manufacturing declined, the Ministry of Commerce, Industry and Energy said.

Foreign direct investment dropped 6.5 percent last year to $10.5 billion, the ministry said today in an e-mailed statement. The amount is expected to be at least $10 billion this year on the continued boom in global mergers and acquisitions, the ministry said.




Koreans want investment, but they don't seem to realize that the way they treat foreigners in Korea directly affect investments. So things like Lonestar, banking issues for expats, univeral opinion of Koreans lying and not honoring contracts, perhaps even visas for us all make news, and all are weighed by the powers that be of companies that choose ultimately not to do business with Korea.

And even the companies that do do business with companies here are none too happy. I speak with lots of guys that do sourcing for Samsung, and many are saying it's not worth doing business with Koreans.
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articulate_ink



Joined: 23 Mar 2004
Location: Left Korea in 2008. Hong Kong now.

PostPosted: Sun Jan 06, 2008 3:04 am    Post subject: Reply with quote

I read that article earlier today and was thinking the same thing. The Koreans are reaping what they've sown.
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thepeel



Joined: 08 Aug 2004

PostPosted: Sun Jan 06, 2008 3:16 am    Post subject: Reply with quote

Korea is a very, very difficult place to do business. They need to change this to have a shot at competing with a value-chain climbing China. China is only a few years away from being able to offer the high-end technology research and products that Korea offers now. LMB knows this, I assume.
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bassexpander



Joined: 13 Sep 2007
Location: Someplace you'd rather be.

PostPosted: Sun Jan 06, 2008 3:34 am    Post subject: Reply with quote

Which is why he's giving the chaebols more power to get involved in banking?

Seriously, I feel another IMF situation coming up in the next 5 years.
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thepeel



Joined: 08 Aug 2004

PostPosted: Sun Jan 06, 2008 3:38 am    Post subject: Reply with quote

bassexpander wrote:
Which is why he's giving the chaebols more power to get involved in banking?

Seriously, I feel another IMF situation coming up in the next 5 years.


So does some of the informed investment community. Korea's finances are, ahem, murky. Nobody knows what's going on up there.
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GoldMember



Joined: 24 Oct 2006

PostPosted: Sun Jan 06, 2008 4:10 am    Post subject: Reply with quote

Foreign involvement in the banking industry has actually added some stability, prudent management and strength to the banking industry.
The Korean government has been critical of the foreign way of doing business here.
The government has this attitude that banks MUST lend to business, no matter how idiotic the business idea, or how high the risk. The foreign banks work on the unpatriotic business model of risk analysis, and good credit management.
The new president would rather have banks owned by corrupt dishonest Korean chaebols, than prudent foreigners. Just wonder how much his view reflects the views of his constituency.
Oopps I said something negative (honest) about Korea! The apologists here are going to be very upset.
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jeffkim1972



Joined: 10 Jan 2007
Location: Mokpo

PostPosted: Sun Jan 06, 2008 4:11 am    Post subject: Reply with quote

Sorry to break it to you guys, but your experiences at a Hagwon are not indicative of the investment climate here.

As far as international contracts go, the Koreans are actually very trustworthy.

The only reason manufacturing investment is down is because the labor costs are very expensive compared to neighboring countries.
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flummuxt



Joined: 15 Mar 2007

PostPosted: Sun Jan 06, 2008 4:11 am    Post subject: Reply with quote

I'm a bit puzzled.

How could foreigners possibly invest in countries that make clearly inferior products?

Don't they know that Korea makes the best of everything in the world?
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VanIslander



Joined: 18 Aug 2003
Location: Geoje, Hadong, Tongyeong,... now in a small coastal island town outside Gyeongsangnamdo!

PostPosted: Sun Jan 06, 2008 4:13 am    Post subject: Reply with quote

jeffkim1972 wrote:
As far as international contracts go, the Koreans are actually very trustworthy

Real Reality, where are you?
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thepeel



Joined: 08 Aug 2004

PostPosted: Sun Jan 06, 2008 4:14 am    Post subject: Reply with quote

jeffkim1972 wrote:
Sorry to break it to you guys, but your experiences at a Hagwon are not indicative of the investment climate here.

As far as international contracts go, the Koreans are actually very trustworthy.

The only reason manufacturing investment is down is because the labor costs are very expensive compared to neighboring countries.


I work in the investment industry in Singapore. We deal heavily with regional economies and individuals.

edit: I worked. Last day was Friday. Homeward bound.
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jeffkim1972



Joined: 10 Jan 2007
Location: Mokpo

PostPosted: Sun Jan 06, 2008 4:16 am    Post subject: Reply with quote

GoldMember wrote:
Foreign involvement in the banking industry has actually added some stability, prudent management and strength to the banking industry.
The Korean government has been critical of the foreign way of doing business here.
The government has this attitude that banks MUST lend to business, no matter how idiotic the business idea, or how high the risk. The foreign banks work on the unpatriotic business model of risk analysis, and good credit management.
The new president would rather have banks owned by corrupt dishonest Korean chaebols, than prudent foreigners. Just wonder how much his view reflects the views of his constituency.
Oopps I said something negative (honest) about Korea! The apologists here are going to be very upset.


Im' going to respond to this not because i'm an apologist and love Korea but because you are wrong.

There is a limit to the risk involved.

Unless anyone has any references or experiences, please do not project your dealing with your hagwon director as "business" experience in Korea.
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Beej



Joined: 05 Mar 2005
Location: Eungam Loop

PostPosted: Sun Jan 06, 2008 4:28 am    Post subject: Reply with quote

jeffkim1972 wrote:
Sorry to break it to you guys, but your experiences at a Hagwon are not indicative of the investment climate here.

As far as international contracts go, the Koreans are actually very trustworthy.
The only reason manufacturing investment is down is because the labor costs are very expensive compared to neighboring countries.


Cough. Lonestar. cough
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thepeel



Joined: 08 Aug 2004

PostPosted: Sun Jan 06, 2008 4:37 am    Post subject: Reply with quote

Yeah, that is absolute nonsense.

Every country has a unique set of problems associated with doing business as a foreigner. In Korea, the assumption that profits are inherently owned by Korea and that how much profit should be extracted depends not on rational taxation but the Gusts of Popular Feeling is one such problem. Another is the near inability to hire outsiders for jobs other than teaching. Koreans like to piss and moan that they don't get "quality foreigners" and yet only permit the hiring of the ESL'ers and the like.

It is also very, very difficult to purchase all but the most unprofitable companies and without an elderly Mr. Kim hanging around the office it is damn near fully impossible to get the bureaucracy to do anything but stand still.

That said, you have much less a chance of fraud in Korea than you do in China, Vietnam and others. You probably will get shaken down in some way but not to the extent that the Chinese will simply take your stuff and use their brother in the CCP to make sure you can't get it back. Also, you are more or less able to hire who you want (that is Korean), unlike Malaysia and the United States (where hiring can be a very legalistic task). Korea has ups and downs. But right now, compared to the rest of the world, her downs are at least perceived to be worse than her ups are better. So FDI is shrinking.

The labour relations situation is appalling as well.
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mistermasan



Joined: 20 Sep 2007
Location: 10+ yrs on Dave's ESL cafe

PostPosted: Sun Jan 06, 2008 4:40 am    Post subject: Reply with quote

do all those koreans moving to shandong and setting up factories there count for anything?
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Ilsanman



Joined: 15 Aug 2003
Location: Bucheon, Korea

PostPosted: Sun Jan 06, 2008 5:16 am    Post subject: Reply with quote

Good luck President Lee.

Sparkling!!
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