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QINGDAO -- Korean textile industries flocked to China in droves in the 1990s following wig makers, tanners and shoemakers because the labor-intensive industries could no longer withstand the increases in Korean labor costs. But 10 years on they are tasting the bitter fruits of failure.
Due to China's improving technology, price offensives and knockoff brands, the Korean textile companies there are in crisis. The failure of Korean textile firms in Qingdao is spreading to some 7,000 other Korean firms in Shandong including wig makers and tanners. That means they must move once again, either into China's technologically backwards hinterland or to Southeast Asia.
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A Chinese worker maintains machinery at a Korean textile factory in Qingdao.
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Some 16 Korean synthetic fiber makers moved to the Qingdao area after Korea and China established diplomatic relations in 1992. Only six remain. Between the Asian financial crisis of 1997 and the early 2000s, the rest either went belly-up or pulled out -- a failure rate of 63 percent. The president of a trading firm who has been working in Qingdao for 13 years said, "Four or five years ago, there were already several Korean factories in the Jiaonan and Jiaozhou Development Zones, south of Qingdao, that were shut down and accumulating dust." An official from another firm said even the six remaining firms are barely making any money and are struggling to keep where they are.
"Over the last two or three years, Chinese production requisites like manpower costs, power costs and land prices have skyrocketed, so declining industries that moved to China to survive are facing a losing battle,Ħħ said Kim Seong-su, the head of the Korea Trade Investment Promotion Agency in Qingdao. "Regardless of the industry, you survive only by piercing the market with novel technologies and high value-added goods. Moving to China in a hurry won't work."
(englishnews@chosun.com )
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