Large South Korean Companies Withdrawing from China | Hacker News Reader

Large South Korean Companies Withdrawing from China

businesskorea.co.kr

74 pointslibpcap23 comments

This started in 2016 when SK installed THAAD systems against North Korea [0], which had extended radar capabilities into the Chinese mainland, though rumblings already began by 2014-15 leading to SK creating a (imo one sided) FTA with Vietnam

This lead to a massive trade war against SK, which almost destroyed Lotte (the chaebol who's land was purchased by the Korean government to install the THAAD system).

Lotte and other Korean chaebols began a MASSIVE decoupling to Vietnam and India during that time period, and are are single-handedly responsible for Vietnam's then surprisingly high GDP growth rate.

Everything, and I mean everything, is basically Chaebol owned in Vietnam because of this pivot from China, and just about every Korean company has plans to have the ability to cease operations in China by 2030 at the latest based on my conversations in Saigon.

Japanese corporations did the same thing in 2012 during the Senkaku Diaoyu Standoff leading to a massive repivoting to India and Thailand, and initiating the Quad and the Blue Dot Network.

[0] - https://www.hbs.edu/faculty/Pages/item.aspx?num=53632

The top 10 companies in Vietnam by revenue, except for Samsung Vietnam, are all state owned. So definitely not controlled by Korean chaebols in any way whatsoever.

What are you talking about?

Most chaebols such as Lotte and Samsung make multiple entities for each of their groups within VN (and those entities in turn try to hide taxes like crazy)

So in Lotte's case, Lotte Shopping Vietnam JSC is different from Lotte Hotels Vietnam JSC is different from Lotte Cinemas Vietnam JSC.

And I'm using Lotte as the most notable example.

Samsung does the same thing as well - Samsung Electronics VN (Samsung Galaxy) is a separate entity from Samsung SDI VN (Samsung batteries).

Most notably, Lotte Property & Development - not VinGroup (!!!) - owns the land in An Khanh Ward in District 2 of HCMC and is building Saigon's version of Pudong [0].

If you've ever been to Saigon you'll know this piece of land is easily the most expensive piece of undeveloped property in all of Vietnam as it's right across from Saigon's District 1 - the traditional CBD and Consulate quarter - and right next to the VIP neighborhood of Thao Dien.

It's called the Lotte Eco Smart City.

And this is just Saigon. If you go to Da Lat, Da Nang, Nha Trang, Cam Ranh, etc it's the same story.

> The top 10 companies in Vietnam by revenue, except for Samsung Vietnam

Where are you getting this data? The only somewhat reputable source is from one the VN trade ministries in 2018, which is towards the beginning of the Korean move to VN from China.

Also, the fact that Samsung Electronics VN was able to outcompete every single petrochemical and military owned company by revenue in 2018 [1] in a country who's economy has been built on ONG extraction (the VN claim in the South China Sea has oil reserves the size of Prudhoue Bay and Natural Gas reserves roughly the size of Urengoy Gas Fields) and VPA ownership of industries (eg. Viettel, VinGroup's founder is from Vietnamese Air Force royalty) is massive

Edit: There is a VN500 list but participation is optional. The only Korean chaebol divions that seemed to have participated were Samsung Electronics and CJ Agribusiness (part of CJ Group - the same chaebol that makes Bibigo food and produces Kdramas like Marry My Husband and movies like Parasite)

[0] - https://mycasagroup.com/lotte-eco-smart-city/

[1] - https://mof.gov.vn/webcenter/portal/tttpen/pages_r/l/detail?...

Vietnamese sources from 2023 have plenty of information and are credible… because it’s Vietnam. Many don’t publish in English, or publish only truncated versions in English.

How do you not know this? Or do you not believe that they exist after 2018?

Frankly, if you actually know what’s what, you would also know how to get copies of this information directly from the relevant ministries in Hanoi. So there’s no need to take my word, or any third party’s word, for it either way.

> Vietnamese sources from 2023 have plenty of information and are credible… because it’s Vietnam. Do you not believe that they exist after 2018

Participation in the VNR500 (the list the MoF mentioned in it's article in 2018) is optional and self reported [0].

I don't think YOU actually read the VNR500's rules and requirements.

> you would also know how to get copies of this information directly from the relevant ministries in Hanoi

I don't want to physically fly to Hanoi and ask for documents that I'm not even sure I'd be allowed to view.

Most Ministries in Vietnam are extremely opaque and don't publish numbers and metrics openly, and when they do, they tend to publish it physically instead of digitally.

Any numbers that get published digitally are difficult in turn to access aside from PR announcements, as a number of Vietnamese sites (government and private) rate limit access abroad.

All we can say is total trade between VN and SK is approx $80B in 2023 [1], and South Korea has been the largest source of FDI in Vietnam since Đổi Mới [2].

I'd also recommend you visit Vietnam sometime to see the changes I'm talking about.

> How do you not know this?

I do NOT appreciate this tone. This is a forum and it's Sunday. I don't need to justify jack to you, this isn't 14.771

[0] - https://vnr500.com.vn/QAs-Bang-xep-hang-Top-500-doanh-nghiep...

[1] - https://www.mofa.go.kr/eng/nation/m_4902/view.do?seq=38

[2] - https://e.vnexpress.net/news/business/economy/recapping-a-35...

> How do you not know this?

Not to mention that this sort of comment goes against the HN guidelines...

I've not read the guidelines but that seems very snowflakey and I'm literally a snowflake.

> Vietnamese sources are credible because it’s Vietnam.

What an incredible sentence. Do you ‘trust the bro’?

For this discussion, Vietnamese sources are credible.

The issue is accessing said sources are difficult as the Vietnamese Government kinda sucks at digitizing and presenting financial and economic data.

Also, most of these subsidiaries are not publicly listed, so any revenue attached to them will be listed within the division it is a part of (Eg. Lotte Cultureworks VN revenue will be treated as part of the larger Lotte Cultureworks SEA bucket in any listings)

My hunch is they probably provide good data to Korean and Japanese financial data aggregators (eg. Mitsui or Shinhan), but I can't be bothered to brush up my Japanese, Korean, or Vietnamese on a Sunday for a random comment on a forum.

This is effort that companies pay people to do. I ain't doing it for free on my weekend

The two examples given in the article are SK petrochemicals no longer profitable/competitive in China and Hyundai downsizing from 5 to 3 plants due to China's rapid transition to EVs.

Not exactly. It's mostly because of the aftermath of the anti-Korea boycott that happened from 2016-Present along with the slowdown due to COVID.

That boycott almost pushed South Korea into recession and made them pivot to Vietnam, and Lotte was functionally banned in China.

My contribution: this doesn't sound related to their recent real estate woes (evergrande)

Yep. South Korea and China have been in the midst of a trade war since 2016.

TLDR: - Trade war because of SK following US directive to install THAAD, which at surface is aimed at NK, but the real target, at least from US perspective, is at China.

- Increasing competition from Chinese firms

- US waging sanctions and trade ban tech war, and the SK firms following US trade restrictions voluntarily or involuntarily. This has made nearly all Chinese sectors examine their supply chain for tech and goods that might be banned by a stroke of pen from Washington and switching to more reliable alternatives. This has the surprising effect of improving competitiveness of many Chinese firms, especially in the areas SK firms are good at. Leading to more number 2

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