BEIJING — Chinese and Republic of Korea (ROK) companies are set to benefit from an even better business environment as the two countries vowed closer ties during a visit by Premier Li Keqiang to ROK, which ended on Nov 2.
Entering China in 1994, ROK construction machinery maker Doosan is embracing the fresh business opportunities afforded by urbanization in China as well as a free trade agreement (FTA) signed on June 1.
“The FTA cut tariffs on certain imports from ROK. The lower production costs will make our excavators more competitive,” said Park Chan-hyuk, general manager of Doosan Infracore China Co Ltd.
Under the FTA, the ROK will eliminate tariffs on 92 percent of all products from China within 20 years, while China will abolish tariffs on 91 percent of all ROK goods.
The FTA, the largest bilateral free trade deal for China in terms of trade volume, covers 17 areas, including investment, trade in goods and services, and trade rules.
Less restrictions will help Doosan make the most of opportunities in the Chinese market as well as Southeast Asian and Central Asian markets, according to Park.
Doosan has a large factory in Yantai city, Shandong province, which faces the ROK across the sea and serves as a major gateway to economic cooperation between the two East Asia neighbors.
“Doosan aims to become one of the world’s top three construction machinery makers by 2020. Thanks to the FTA, robust China business will be a major driver,” said Park.
“The FTA is a milestone in the development of bilateral economic ties,” said the Premier during his first visit to the ROK.
Hyundai Motor Group is also upbeat about the Chinese market. In July, the ROK auto giant invested $290 million in a R&D center in Yantai city.
The Yantai center is the only new energy vehicles (NEV) R&D center outside the ROK for the global market. Its annual revenue is expected to be around $100 million.
