The shock was understandable in that it was the first time a South Korean financial firm has ever made a purchase of such size there. The group's strategy in Hong Kong is aggressive. Mirae Asset Securities upgraded its branch in Hong Kong to a local corporate body in January, increasing the number of its staff to 16. It had only three employees until late last year. In addition, it has 45 employees including locals who are tending its W6 trillion "China funds" at the Hong Kong bourse.

"As we manage the assets, we plan to sell foreigners nine funds on the Hong Kong bourse soon. We'll also operate our own research center," said Lee Kyung-young, chief executive officer of Mirae Asset Hong Kong.

Indeed, the Hong Kong financial market is getting crowded with South Korean companies. These companies are paying attention to the fact that the Hong Kong stock market is booming with the rally of H shares, the shares put up by Hong Kong-listed mainland Chinese companies, and they've noted Hong Kong's attractiveness as the best gateway to the Chinese market.

Late last year, Woori Bank and Shinhan Bank established investment banking firms in Hong Kong. Following them, the Korea Money Brokerage Corp., Goodmorning Shinhan Securities, Daishin Securities, Samsung Investment Trust Management and the National Agricultural Cooperative Federation have recently opened local corporations or are preparing to do so soon. The Korea Development Bank, the Industrial Bank of Korea, the Korea Exchange Bank and Korea Investment & Securities have also sharply expanded their investment banking and asset management capabilities in Hong Kong.

As a result, the number of South Korean financial workers in Hong Kong has more than doubled from what it was just three years ago. It's a reemergence of the South Korean financial sector 10 years after it collapsed in the wake of the Asian financial crisis of 1997.

Yet there are several hurdles for South Korean firms looking for success in Hong Kong. The first is the small size of their branches and staffs. No South Korean financial firm in Hong Kong has more than 50 executives and employees. But each of the global investment banking firms, such as Union Bank of Switzerland and Deutsche Bank, has a staff of at least 500-2,000. Goldman Sachs has about 60 employees in its sales department exclusively handling South Korean business. Each of the large investment banking firms has about 100 experts who gather information on business projects and nations.

The shortage of staff means a lack of personnel who can collect information and establish personal connections. The CEO of a South Korean banking firm in Hong Kong said, "Korean financial institutions in Hong Kong are only gathering second or third-rate information through their agents. It hasn't been long since Korean firms began advancing into Hong Kong, and they have low recognition here. As such, it's impossible for them to compete on the same level as other foreign firms."

Another hurdle is that the South Korean firms have no proper profit models or medium- and long-term strategies. "Still many Korean financial institutions have brought to Hong Kong what they can carry out back in Korea," the CEO of a South Korean securities firm in Hong Kong said.

What is more urgent is the need for the South Korean government and financial institutions to change their mindset. "Many Korean financial firms are advancing into Hong Kong now, but I'm sure that many will close down or downsize when their deficits pile up for two to three straight years," said the president of a South Korean financial firm in Hong Kong. "Emphasis is being laid on localization of Korean firms. But it's a hindrance to require Korean bank branches to follow the regulations of both Hong Kong and Korea," the CEO of a South Korean bank branch in Hong Kong complained.

It seems unavoidable that South Korea's financial firms will advance into the international market in Hong Kong and try to build themselves up there. But if they just repeat their past practice of embellishing their facade without trying to strengthen their core foundations, then the country's vision of becoming a financial power will end up a mere dream.

This column was contributed by Song Eui-dal, the Chosun Ilbo's correspondent in Hong Kong.